SERVICE TAX ON AIR TRAVEL AGENT AND SUB AGENT

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Advocate (Querist)
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06 September 2016 I am a IATA travel agent. I issue tickets from my own IATA quota, collect service tax and remit to the reveune authority under AIR TRAVEL AGENT category. I also issue tickets from another IATA agent in which case I become a subagent since they pass more discount than I would normally get if issued the ticket directly from the airline from our quota. The main agent levies applicable service tax on the purchase bills to us and we sell them to our ciients. There is a demand by the service tax dept after the completion of service tax audit of our travel agent to pay service tax under the BAS business auxillary service for the last 4 years with interest on commission recieved from other travel agent on tickets purchased from them as a sub agent. They have mentioned that the service of booking is taxable and not the service of passage and hence the commission recieved by us as a sub agent is taxable as we are promoting thier business like a service of Business Auxillary service under section 65(105)(ZZB) of finance act 1994. Our clarification to them is that we are not promoting the business of the agent from where we are buying tickets, we are merely recieving a discount from them on tickets and not commission and there is not formal or informal agreement between us. Kindly advise us correctly.

Sunil Kumar

Sunil Kumar (Expert)
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12 September 2016 Sir, are you buying ticket on your on account or work under commission model ?

Advocate

Advocate (Querist)
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30 June 2017 we purchase on our own account and get discount on air ticket amount from IATA agent and on such discount they also deduct TDS. under which category now we have to registered in GST ie. under Business Auxiliary servics or under Air Travel Agent services . please clarify

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