Whether service tax is applicable for following situation
This query is : Resolved
04 March 2015
Please do enlighten me on following aspects
1) Mr. A carries on business of buying & selling tickets – of Airlines , Railways & Long route Travel Buses .
He gets discount from the Main Agent ( say IATA agent for Air Tickets ) & after adding his profits , sells the same to customers .
The Service Tax Act puts ‘ Trading of Goods ‘ in the Negative List , i.e., not liable to Service Tax .
The Same Act defines ‘Goods’ as follows :
“ Goods ” means every kind of movable property other than actionable claim and money ; and includes securities , growing crops , grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale .
Can one argue that his business is of buying & Selling Tickets ( which is a Movable Property ) , he is not liable to Service Tax ?
2) In a case decided by Ahmedabad Tribunal , the following remarks form part of judgment :
THE term ‘ Trading ‘ means the act of buying and selling . It involves the selling of goods in the same form as it was purchased .Thus , no further processing is done thereupon .
Though , the term trading activity has been included in the definition of the exempted services ; yet it is not explained as to what will be counted as a “ trading activity “ . In common parlance , trading activity is the sale of goods in the same form as they are purchased . Thus , if any goods that are purchased are sold as it is , it will be termed as trading activity .
1) Mr. A carries on business of buying & selling tickets – of Airlines , Railways & Long route Travel Buses .
He gets discount from the Main Agent ( say IATA agent for Air Tickets ) & after adding his profits , sells the same to customers .
The Service Tax Act puts ‘ Trading of Goods ‘ in the Negative List , i.e., not liable to Service Tax .
The Same Act defines ‘Goods’ as follows :
“ Goods ” means every kind of movable property other than actionable claim and money ; and includes securities , growing crops , grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale .
Can one argue that his business is of buying & Selling Tickets ( which is a Movable Property ) , he is not liable to Service Tax ?
2) In a case decided by Ahmedabad Tribunal , the following remarks form part of judgment :
THE term ‘ Trading ‘ means the act of buying and selling . It involves the selling of goods in the same form as it was purchased .Thus , no further processing is done thereupon .
Though , the term trading activity has been included in the definition of the exempted services ; yet it is not explained as to what will be counted as a “ trading activity “ . In common parlance , trading activity is the sale of goods in the same form as they are purchased . Thus , if any goods that are purchased are sold as it is , it will be termed as trading activity .
CA R SEETHARAMAN
(Expert)
04 March 2015
First of all you have to agree with me that Airlines, Railways and Buses only provide services.
The tickets you sell is only pass to avail the services in which name is mentioned, not transferable to others.
Trading activity is sale of goods, but air ticket/ railway ticket/ bus ticket is not a goods for trading.
It is not a trading activity exempted from service tax.
The tickets you sell is only pass to avail the services in which name is mentioned, not transferable to others.
Trading activity is sale of goods, but air ticket/ railway ticket/ bus ticket is not a goods for trading.
It is not a trading activity exempted from service tax.
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