SERVICE TAX APPLICABILITY ON TOUR OPERATORS
To understand the concept of Tour Operator first of all we have to clear that there is major difference between tour operator and Travel Agent Service.Tour Operator is wide term than Travel Agent.
Difference between Tour Operator Service and Travel Agent Service can be understand easily by following Table
Tour Operator Service
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Travel Agent Service
|
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Travel Agent means any person engaged to providing service to customer in relation to booking of passage of travel by road.
That Means Except
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After understanding the difference in our mind following question take place
What Is “Taxable Service”?
What is the Definition of “Tour”?
Who Is “Tour Operator”?
What Service Tax Applicability on Tour Operator i.e (what should be Rate of Service Tax and how to charge Etc)?
Is There any exemption for service provided by Tour Operator ?
As Per Section 65 (105) (n) of Finance Act, 1994 as amended “Taxable Service” means
Any service provided or
To be provided to any person, by a tour operator in relation to a tour.
As Per Section 65(113) of Finance Act, 1994 as amended “Tour” means
A journey from one place to another irrespective of the distance between such places.
As Per Section 65(115) of Finance Act, 1994 as amended “Tour Operator” Means
i. “Tour Operator” means any person, Firm or Company engaged in the business of
Planning,
Scheduling,
organizing or arranging tours like arrangements of accommodation, sight-seeing or other similar services by any mode of transport
ii. Any Public sector undertaking operating tours.
iii. Any person, Firm or Company engaged in the business of tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act 1988 (59 of 1988).
Service Tax Applicability On Tour Operator
| SR. NO | Description of taxable service | %Abatement | %taxable |
| 1 | Services by a tour operator in relationto,- (i) a package tourIncluding cost of accommodation, food,transport arrangement, tourist guide, entry to monuments and other similar services. Condition The bill issued for this purpose indicates that it is inclusive of charges for such a tour. | 75 | 25 |
| 2 | A tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tourCondition 1. The invoice, bill or challan issued indicates that it is towards the charges for such accommodation. 2. This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation. | 90 | 10 |
| 3 | (iii) Any services other than specified at (i) and (ii) above.ConditionThe bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour. | 60 | 40 |
General Exemption for All Service Provider as well as Tour Operator.
Service Provided to United Nation
Service Provided to International Organization e.g.( World Health Organization , IMF International Labour Organization) etc.
Service Provided to Officers of any foreign diplomatic mission in India or their family members for official or personal use are exempt.
Service Provided Outside of India .
Service Provided to Special Economic Zone i.e (Special Economic zone (SEZ) is a geographical region that is designed to export goods and provide employment)
Exemption for Small scale service Provider whose value of service does not exceed Rs 10 lakh .(But this exemption is available only if value Of Taxable service in the preceding year does not exceed Rs 10 Lakh that means for exemption of service tax we have to check preceding year value of service provided).
Service Provided to International Organization e.g.( World Health Organization , IMF International Labour Organization) etc.
Service Provided to Officers of any foreign diplomatic mission in India or their family members for official or personal use are exempt.
Service Provided Outside of India .
Service Provided to Special Economic Zone i.e (Special Economic zone (SEZ) is a geographical region that is designed to export goods and provide employment)
Exemption for Small scale service Provider whose value of service does not exceed Rs 10 lakh .(But this exemption is available only if value Of Taxable service in the preceding year does not exceed Rs 10 Lakh that means for exemption of service tax we have to check preceding year value of service provided).
Service Provided Free Of Cost.
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