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Invoice of air travel agent - rule 6(7)

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)

13 December 2012

As per Rule 6(7) of ST Rules 1994, person liable for paying service tax in relation to services of booking of tickets for air travel shall be .6% and 1.2% of basic fare in case of domestic and international travel respectively.

We have received an invoice from air travel agent where basic fare is 17,500/- and service tax charged is rs 54.

Can anyone discuss how service tax is calculated. Is it computed on commission on basic fare. Commission is not exhibited in the invoice and hence the problem.

Regards,

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2 Replies

dharmendra singh (asst manager finance) (53 Points)
Replied 13 December 2012

For service tax calculation basic fare will be the amount on which he get his comission, that may be different then the amt shown in the tkt.

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Vikas (CA) (1135 Points)
Replied 14 December 2012

You are absolutely right, Dipjyoti.

But, the Rule 6(7) is merely an option, he may choose it or not, it depends upon him.

However, the contention seems right, even if the segregation is there, the ticket amount should have been shown separately.

You may contact them and ask for valuation of such service tax charged, they should be in a position to clarify the same.

Further, there are certain abatements given for tour operators also. You may check whether the services obtained were merely booking of air ticket or was there any package involved.