We are executing Operating,Marketing and Technical services agreement with the Owner's of the property having Hotels.Under the agreement we are running the operations of the Hotel by placing General Manager and other managers of the department.Also the complete marketing support for Hotel is from our end.For this the Owner of the Hotel is paying a percentage of fees on gross operating income of the hotels monthwise.In the bills raised we are charging service tax.But the Owner's are disputing service tax as they were saying that the services are not leviable.Do we raise a bill adding service tax or not.
Also we raising debit note for salaries of our manager and asking the Owner's for reimbursement for same.Do we add service tax on this or not.
Are the services of Operation of the hotel and marketing services are leviable or not.
Please advise.
Please advise whether we are liable to deposit the service tax or not.
17 June 2009
The agreement would be cirtical. Where the services are of running the organisation there may not be any liability under service tax.However the possible coverage under busienss support services maybe examined.