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Querist : Anonymous

Querist : Anonymous (Querist)

18 January 2010 My client books hotels for its customers. Some hotels charge luxury tax as well. My client after adding its commission tells the total package amount to its customers. Now the question is whether service tax is to be charged on the total amt including luxury tax or on basic amt+ only commission. For eg

Basic-4800
Luxury tax 100
Comm 100.

So service tax on 4900 or total 5000??

Abraham Cherian

Abraham Cherian (Expert)

18 January 2010 If your client is a commission agent and if he acting as a pure agent of the customer, then he needs to charge ST only on his commission ie on the Rs.100 in the example given by you. The cost of hotel can be excluded from the value of the taxable service. Kindly go through the ST determination of value Rules ,2006 Rule 5(2) and see if all conditions are met. If not on the entire amount ie Rs.5,000/- ST has to be charged

Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2010 Thank You.

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