Service Tax Credit

This query is : Resolved

Priya R (Querist)
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14 October 2016 I am in a Travel and Tour Operator Proprietorship. I have done some travel insurance through My supplier. He is IRDAI registered. He is charging Service tax on premium. Can I take credit of the same..??

CA SAGAR M. AHUJA

CA SAGAR M. AHUJA (Expert)
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14 October 2016 As Service tax payable by tour operator on 25%/40%/10% of the value of services, subject to condition of non -availment of Cenvat credit, as per Sr No.11 of Notification No. 26/2012 dated 20-06-22012.
It is create problem when any work is to be subcontracted or outsourced to another tour operator, so any s.tax charge by sub contractor tour operator is become the cost of the main service provider.
After that this problem as been realised by Government.Now, w.e.f 01-10-2014, Cenvat credit on input service of tour operator is available. But no cenvat credit for any other input services , inputs and capital goods.
In your case you can not take cenvat of S.Tax paid on Insurance Premium.
Thanks.

Priya R

Priya R (Querist)
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15 October 2016 Thanks. but we are registered under taxable service of Tour operators, Insurance Auxiliary services, Air Travel Agent ...in that case can we take credit.?

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CA SAGAR M. AHUJA

CA SAGAR M. AHUJA (Expert)
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15 October 2016 Registration is not the main content to take the cenvat but in which form your output services is to be provided and in which form it is best suitable that is the concern and on type of Output services charged by you the input credits will be depend.
Like Whether any abatement is available or not and etc......
Thanks.

Priya R

Priya R (Querist)
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17 October 2016 In that case. I want to clear one more thing. Sometimes we provide packages.. abatement rate of 4.5% is applied. but sometimes we provide things separately..like accommodation, cruise, tickets, insurance , visa...then how will we charge service tax in that case..?? Separately..???

CA SAGAR M. AHUJA

CA SAGAR M. AHUJA (Expert)
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17 October 2016 ABATEMENT ON SERVICES OF TOUR OPERATORS FOR SERVICE TAX PAYMENT

The Tour Operator is not entitled to avail CENVAT Credit on input, capital goods and input services other than input services of a Tour Operator. There is no change in this provision.

Revised chart of Service Tax applicable for tour operators w e.f. 1st April 2016 is as under:-
SERVICE TAX @ S.B.CESS @ KKC @ Total
SERVICE 14 % 0.50 % 0.50% 15.0 %
ROOM ONLY (After abatement of 90%) 1.40 % 0.05 % 0.05% 1.50 %
Other than above including TOUR 4.20 % 0.15 % 0.15% 4.45 %
PACKAGEs and TRANSPORT
(after abatement of 70%)
Those who are registered under 5.60 % 0.20 % 0.20% 6.00%
TRANSPORT CATEGORY
(After abatement of 60%)
Please note that

• CENVAT Credit will be available only between tour operators to tour operators,
• CENVAT Credit will be available on Service Tax & KKC part only
• Swachh Bharat Cess to be shown separately as “SB Cess”. No CENVAT Credit will be available on SB Cess.
• Revised rates as indicated in the above table shall apply to invoicing made on or after 01.04.2016.