Taxable value of services for air travel agent is amount charged in bill excluding air fare but including commission received by air travel agent in relation to the booking. The agent can opt either of 2 methods for tax calculation
1. Taxable @ 15% over commission received or
2. Under composition scheme:
Domestic booking : 0.75% of basic fare
International booking: 1.5% of basic fare
Basic fair means part of the air fare on which commission is normally paid by airlines to air travel agent.
Thank you sir for your reply.
Also i would like to ask for computing SSP limit in case of composition scheme, what would the Gross amount charged in that case?
And in normal case, whether commission recd. from customers will be only considered which is not shown separately in invoice or commision earned through airlines will also be taken into consideration?
1. "............computing SSP limit in case of composition scheme, .........."
Both are independent of each other. SSP limit is upto first 10 lakhs turnover; once crossed, ST liability applicable. Now its assessee to decide whether to choose composition rate, or full rate with ITC,
2. Let me understand how you collect commission from customer without any bill? How you account it in books?
Sir,
1. If assessee chose for composition scheme and forgo his ITC, then shall he pay service tax from the very first transaction or wait for crossing his sale of tickets by 10lakhs?
2. I'm not saying that no invoice is raised, actually i meant to ask that whether both the commission recd. from airlines and customers be accounted for while calculating gross amount charged for travel agency services?
1. For the first time crossing SSP limit, he has to charge over and above Rs. 10 L; but for next year onwards he has to charge from first rupee itself.
2. YES. By whatever means. it the amount is accounted in books, its chargeble to tax.
Ok Sir, now I got clarity regarding this concept. Thanks a lot sir. You have been a great help.
And one thing more, is the rate under composition scheme is 0.75/1.5% or 0.7/1.4%?
Effective 01 June 2016, it has been incresed to 0.75/1.5; including Krishi Kalyan Cess
Ok sir. Got it. 😊
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