Double payment of Service Tax/ Cess- IS THAT JUSTIFIED ???

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Anurag (Querist)

01 April 2009 I'm a Tour Operator & Travel Agent based at Agra. I get my Domestic & International Ticketis issued by an IATA Agent in Delhi. For which my associate agent in Delhi issue Invoice in favour of my company, and charge Service Tax @ 0.6% on Basic Fare (in case of Domestic Tickets and @ 1.2% on basic fare (in case of Int'l air tickets).

I also issue my Invoice for the same ticket to hand over to my clients and charge the same rate of service Tax (as by my associate agent in Delhi.

Means, I charge the same amount of Service Tax, which I have already paid to my Associate Agent in Delhi (who is issuing tickets for my clients).

So my question is that-

1.Would I be entitled for Cenvat Credit of the Service Tax/ Cess, which I have already paid to my Agent in Delhi??

2. If I'm entitled for Cenvat Credit, should I not pay any Service Tax/ Cess (locally in Agra) for the tickets issued thru my agent in Delhi.

3. I came to know that if one claims Abatement, he is not entitled for Cenvat Credit. As I'm charging my clients @ 0.6% and 1.2% on the basic fare of tickets (means I have claimed the Abatement), will I be entitled for Cenvat Credit??

4. If I'm not entitled for Cenvat Credit, I would be paying DOUBLE Service Tax/ Cess (1. to my Agent in Delhi & 2. in Agra locally), where as I'm charging the Service Tax from the client only for one time.

Paying the service tax/ cess for the second time (locally in Agra) would reduce our profits. IS IT JUSTIFIED??

KINDLY ADVISE.

Yours Sincerely,

Anurag