Service tax on TRavel services

This query is : Resolved

Monika Ahuja (Querist)
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24 April 2009 I have got invoices from travel agents but they are billing these with the service tax rates on applicable amount with 12.36%. My qusetion is, are the air/ travel services are not effected with the reduced service tax notification, do these services be billed with service tax rate of 12.36% on the proportionate amount as applicable in domestic & foreign flights instead of 10.3%.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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24 April 2009 The applicabiolity of Service Tax notifications are different from Income Tax.

Service TAx notifications are applicable from the date they issued.

So if your services falls prior to this date, they may charge you old S. rate.

Dayal

Dayal (Expert)
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26 April 2009 Why not check the provisions wherein Under sub-rule (7) of rule 6 as amended by Not. No. 17/2006 Service Tax where an air travel agent can discharge Service Tax at the rate of 0.6% of the basic fare in case of domestic booking and @1.2% of the basic fare in the case of international tickets towards discharge of his Service Tax liability instead of paying tax the tax at the prevailing rates.

The rate of 10.3 is applicable from 24-02-09, therefore 12.36% cannot be charged after this date, if charged, you have the right to refuse the payment, or report to the authorities stating violation of provisions of the act

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