Service tax for travel agent

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Ganesh

24 Points Posted on 27 September 2014

We have set up an LLP company on 30th May 2014. Our nature of business is travel agency. We have taken agency from almost all the Online travel agency to book flight, Hotels and bus. For each ticket booked, the online travel company(whose agency we have taken) deducts some money from our commission as service tax. They told us that if we will be paying service tax at our end then they will revert us the amount.

So I have some doubts :

1. I read somewhere that if the serviceable amount is less than 10Lakh then we can get the exemption. As we have not serviced for amount more than 10 lakh from may2014 to till date so whether we need to pay service tax in this quarter ?

2. What is rate of service charge for the type of service we are providing ?

A quick reply will be appriciated.

Replies (2)

Kashish Gupta

B.com (H) ACA

268 Points Posted on 30 September 2014

Dear Ganesh

1. Deduction from your commission is on account of TDS not Service Tax. You will get a refund of that while filing Income Tax Return.

2. The limit of Rs. 10lacs is for Small Service Providers. You are not required to charge service tax on your services until you does not provide services for Rs. 10 lacs during a year.

However, such an exemption is optional. You are advised to avail that exemption if value of your services do not exceed Rs. 10 lacs during 2014-15.

Kashish Gupta

B.com (H) ACA

268 Points Posted on 01 October 2014

Further, as far as your services are concerned, you can avail benefit of E/N 26/2012 - TOUR OPERATOR in relation to a package tour.

You are required to charge service tax on 25% portion of the bill @ 12.36% and in doing so you will not be allowed to avail cenvat credit of input tax paid.