Facts :
Company ABC Limited is in the Aviation Business. It sells tickets Tickets at the rates : 1. Full Fares 2. Discounts, 3. Complementary. On complementary tickets only taxes are collected. There is one more scheme under which an economy class ticket is upgraded to Business class, by giving a discount of upgraded fare of 50%. For example : Economy class ticket of Dehi and Mumbai is for10,000 and Business class ticket is of25,000/-. As a special last minute case, company Upgrades the Economy class ticket of10,000/- to Busiess class by charging8,000/- and not15,000/- which happens to be normal published fare.
Issue:
Whether the rate of service tax @ 10.3% should be chargeable at10,000 ( Economy class fare ) +8,000/- ( the upgradation charges), OR
Whether the rate of service tax @ 10.3% should be chargeable at10,000 ( Economy class fare ) +15,000/- (the full fare).
By way of ABC company giving discount, why the government exchequre should get less amount.
The sitting and services arrangement in the aircraft does not differentiate between the passanger who paid25,000/ and the Passanger who paid18,000/-
Please Advice.
CAclubindia
