No Service tax on incentives received by travel agents from airlines or CRS companies

Last updated: 19 July 2023

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The Supreme Court has ruled that travel agents do not have to pay service tax on performance-linked bonuses or commissions received from airlines and Computer Reservation Service (CRS) companies. The court agreed that these incentives, paid for achieving booking targets, do not constitute 'Business Auxiliary Services' as the agents primarily serve passengers, not promote airlines. This decision dismisses the Revenue Department's appeal.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court in Principal Commissioner Central Excise Delhi I v. SOTC Travels Services Private Limited [Civil Appeal No.3702 of 2023 dated May 15, 2023] dismissed the Appeal filed by the Revenue Department by relying on the judgement wherein it was held that the Performance linked bonus ("PLB") and Computer reservation service ("CRS") fees received by airline agents are not subject to service tax under the category of ‘Business Auxiliary Services' ("BAS").

Citation :
Civil Appeal No.3702 of 2023 dated May 15, 2023

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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