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Service tax query

Neha sharma (-) (1257 Points)

26 October 2013

Our client intends to start an online ticketing portal just like bookmyshow.com

Ticket Price = 400

Online Booking Charge = 30

Total Amt payable = 430

On what amount would service tax be levied in this case - Rs. 400 or Rs. 30

Moreover, in case he does not show the online booking charge as Rs 30 and directly charges Rs. 430, on what amount would the service tax be levied?

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3 Replies

Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 26 October 2013

I think ticket charges will not be included...because in case of Travel agents ....only the commission charges are liable to ST...so applying the same logic over here we can say that ticket charges not liable to ST.

Further, ticket fare is not an integral part of service....but only incidental or connected to booking ...

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 30 October 2013

The levy of Service Tax on 'Value of Taxable Service' and by all means, in this case, the value charged for providing service is Rs. 30 Only. so, tax levied on that only. But the confusion has been created by Rule 5 of Service Tax (Determination of Value)Rules, 2006 which has been held as ultra vires the Act by the Delhi High Court in the case of Intercontinental. To prevent future litigation, Show Rs. 30 as the service charges separately and Rs. 400 as ticket charge collected on behalf of client on actual basis and enter into pure agent agreement with the client.

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