We are the new starter of Airline Ticket & holiday Booking Firm. We are a sub Agent & we had crossed the total turnover of 10 Lakh. We would like to know how the service tax for international Airline booking is count specially for subagent? for e.g 100 Rs Ticket is there then our main agent will charge us 101.21 Rs (Considering 1.21 % Service Tax). Now due to open market & heavy competition we are giving it to our customer at 101.71 Rs to 102.71 Rs Range. (0.5 to 1.5 % Profit Ratio only). Now if once again we have to pay the service tax on it (1.21 % of 101.71 Rs) then it will come to 1.23 Rupees which will be more than our profit of 50 Paisa & we will be in loss. If we include the serivce tax in our total final bill of 101.71 Rupees, then it will become the 101.21 % Amount & So 100 % amount will be the 100.49 rupees, which will not match to our Net Price of 101.21 Rupees which our main Agent has charged (Bill of both will mismatch). so in this case what should we do? Can anybody guide for this?
Please revert back if you have any query.
CAclubindia
