service tax on air ticket as sub agent

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Shweta

Accountant

21 Points Posted on 23 May 2009

Dear all

we are booking tickets for our clients we buy them from various agents or internet (airline websites) generally the agents from whom we buy tickets charge us service tax @ 1.30 on base fare without airline taxes

for example if ticket base fare is 10000/-

service tax charged by agency is 130/-

We end up paying Rs 10130/-

we sell these tickets to our clients say for 11000/- . so how much service tax should be charged and with what narration or are we admissible for Cenvat credit

we bought ticket for 10103 and sold it for 11000/ + ( 113/- service tax) = 11113/- in short we end up paying double service tax.

As i understand we take abetment i.e charge service tax @ 1.03 only so can we take cenvat credit or not

Replies (2)

CA-ASPIRANT

CA-STUDENT

287 Points Posted on 23 May 2009

You are not liable to service tax at all.

FOR DETAIL YOU MUST REFER S.S.GUPTA Books on SERVICE TAX.

Madhukar N Hiregange

Chartered Accountant

33545 Points Posted on 24 May 2009

Only the AITA agents liable. Sub brokers not liable.

It maybe a good idea to intimate the department the fact that you are not paying or for your principal to infomr the dept that the sub agents are not paying. This would avoid a demand under some other catgeory of services.