Tour operating service

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When a tourist approaches a tour operator, the tour operator approaches another tour operator who raises a bill in the name of the first tour operator charging service tax after abatement.  The first tour operator raises a bill on the tourist for higher amount. In my opinion the first tour operator has to again charge service tax which is not eligible for any input credit.

 

Some times the First tour operator raises a bill for the tour for the like amount raised by the second tour operator & reflects certain amount as "service charges".  In this circumstances also, the total amount will be subject to service tax without any input. Kindly confirm whether my understanding is correct

Replies (4)

Hey Hemawati, I am not able to undertand your query.. And what is the relation between the first tour operator collecting service tax from tourist and input credit for the 1st tour operator. 

One of our client ‘sells” package tours. He himself does not arrange the tours. He “buys” the package from other organizers or authorized agents and in turn bills to his customer. The billing is done for a higher amount plus service charges.

Eg. He may buy the package for 90,000+ service tax and bill it for 95000+2000 being service charge.

Is he liable to Service tax on 97000 or on 7000(90000-97000) only. Any possibility of taking input credit.

He has to take service tax on whole amount  and he can take input credit for the service tax paid by him to the operator who is actually arraning the tour. 

I would like to invite your kind attention to notification no.26/2012 dt:20/06/2012 wherein it is clearly stated that the tour operator availing abatement is not entitled to any type of input credit. But according to you, input credit is available. Can you clarify on this ?


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