Dear Colleagues
My client arranges for sight seeing trip both within India outside India. The tour package includes flight charges, hotel accommodation, local sight seeing, visa charges, travel insurance etc. My client actually get sight seeing package done with another agency who represent foreign company who arranges for local sight seeing. The bill by the other agency is raised in the name of my client so also the other parties who handle visa insurance. My client aggregates the total cost, adds up his margin raises a bill on the tourist, some times as single amount some times giving break up for flight charges, local sight seeing etc. My question is whether my client is liable to pay service tax under “Tour Operator Services” for foreign tour packages. I am bit confused because of the following remarks found in Page 248 of 2011 edition of the book titled “Law, Practice Procedure of Service Tax” by J.K.Mittal published by CCH.“Whether Services for arranging tours abroad are taxable ? Service tax on the services rendered by the tour operator is only on services rendered in India (except Jammu Kashmir) in respect of a tour within the Indian territory. Service rendered by tour operator in respect of out bound tourism, i.e., for tours abroad, do not attract service tax.”My understanding is gross value including flight charges subject to abatement of 75 is taxable. Assuming that the tourist pays my client for the bill by way of foreign exchange, whether my client is entitled to claim exemption under Export of Services Rulespaydays loans online
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