Tour operator services
This query is : Resolved
22 March 2013
Hi...A tour operator is providing services to a company. Who should pay service tax? Should the company pay tax on reverse charge basis?
When a tour operator is providing services to another tour operator, who should pay service tax?
When a tour operator is providing services to another tour operator, who should pay service tax?
23 March 2013
No, there is no reverse charge on tour operator service. Therefore the person responsible for payment of service tax is the provider of service, no matter who is the receiver of this service.
23 March 2013
Tax is payable only on 25% of the total value of bill which should be inclusive of all charges (transportation, accomodation, food etc.)
23 March 2013
No Reverse Charge as Said by Priti.
But Abatement Case Differs, Tell me Fact Like Service Include any package tour, accommodation bill or its customized every time.
if packaged tour :- 75% abatement
not packaged tour but include accommodation booking : - 90% abatement
not package, not accommodation booking but
bill include accommodation bill :- 60% abatement
Pls read with Sr. No. 11 of Notification No. 26/2012-ST dated 20-6-2012
But Abatement Case Differs, Tell me Fact Like Service Include any package tour, accommodation bill or its customized every time.
if packaged tour :- 75% abatement
not packaged tour but include accommodation booking : - 90% abatement
not package, not accommodation booking but
bill include accommodation bill :- 60% abatement
Pls read with Sr. No. 11 of Notification No. 26/2012-ST dated 20-6-2012
25 March 2013
thanks for ur reply.
But Sr. No. 7(a)of Notification No. 30/2012 -ST dated 20-6-2012, states that if service receiver is a company, the company should pay the service tax
But Sr. No. 7(a)of Notification No. 30/2012 -ST dated 20-6-2012, states that if service receiver is a company, the company should pay the service tax
02 August 2025
Sure! Here's a clear explanation on the **service tax liability and reverse charge applicability for tour operator services** based on your discussion and relevant notifications:
---
### Who pays service tax on Tour Operator Services?
* **Basic Rule:** The **service provider (tour operator)** is liable to pay service tax on the tour operator services provided.
* There is **no reverse charge** mechanism applicable on tour operator services when provided to a company or to another tour operator. So, the **service receiver does NOT pay tax under reverse charge** on these services.
---
### Abatement (Taxable Value Reduction) on Tour Operator Services
* As per **Notification No. 26/2012-ST dated 20-06-2012** (Sl. No. 11):
* Tax is payable on **25% of the gross amount charged** by the tour operator (i.e., 75% abatement) if it’s a **package tour** including transportation, accommodation, food etc.
* If the service is **not a package tour but includes accommodation booking**, a **90% abatement** is available (meaning tax is on 10% of the gross amount).
* Other cases have different abatements depending on the nature of the service.
---
### What about Notification No. 30/2012-ST (Reverse Charge)?
* Notification No. 30/2012-ST lists specific services on which **reverse charge applies** and who should pay the tax.
* Tour operator services **are NOT covered under reverse charge** even if the service receiver is a company.
* So, the company receiving tour operator services **is NOT liable to pay service tax under reverse charge**. The **tour operator must pay**.
---
### What if Tour Operator Provides Services to Another Tour Operator?
* Same rule applies: The **service provider pays service tax**.
* There is **no reverse charge** on the recipient tour operator.
---
### Summary:
| Scenario | Who pays Service Tax? | Taxable Value (After Abatement) | Reverse Charge Applicable? |
| ----------------------------------------------- | --------------------- | ---------------------------------------------- | -------------------------- |
| Tour operator provides to company | Tour Operator | 25% of gross for package tours (75% abatement) | No |
| Tour operator provides to another tour operator | Tour Operator | As above | No |
| Company receives tour operator services | Not liable | N/A | No |
---
If you want, I can help draft a concise note on this for you. Would that be helpful?
---
### Who pays service tax on Tour Operator Services?
* **Basic Rule:** The **service provider (tour operator)** is liable to pay service tax on the tour operator services provided.
* There is **no reverse charge** mechanism applicable on tour operator services when provided to a company or to another tour operator. So, the **service receiver does NOT pay tax under reverse charge** on these services.
---
### Abatement (Taxable Value Reduction) on Tour Operator Services
* As per **Notification No. 26/2012-ST dated 20-06-2012** (Sl. No. 11):
* Tax is payable on **25% of the gross amount charged** by the tour operator (i.e., 75% abatement) if it’s a **package tour** including transportation, accommodation, food etc.
* If the service is **not a package tour but includes accommodation booking**, a **90% abatement** is available (meaning tax is on 10% of the gross amount).
* Other cases have different abatements depending on the nature of the service.
---
### What about Notification No. 30/2012-ST (Reverse Charge)?
* Notification No. 30/2012-ST lists specific services on which **reverse charge applies** and who should pay the tax.
* Tour operator services **are NOT covered under reverse charge** even if the service receiver is a company.
* So, the company receiving tour operator services **is NOT liable to pay service tax under reverse charge**. The **tour operator must pay**.
---
### What if Tour Operator Provides Services to Another Tour Operator?
* Same rule applies: The **service provider pays service tax**.
* There is **no reverse charge** on the recipient tour operator.
---
### Summary:
| Scenario | Who pays Service Tax? | Taxable Value (After Abatement) | Reverse Charge Applicable? |
| ----------------------------------------------- | --------------------- | ---------------------------------------------- | -------------------------- |
| Tour operator provides to company | Tour Operator | 25% of gross for package tours (75% abatement) | No |
| Tour operator provides to another tour operator | Tour Operator | As above | No |
| Company receives tour operator services | Not liable | N/A | No |
---
If you want, I can help draft a concise note on this for you. Would that be helpful?
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