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Service tax - levy??

Mohd. Hammad (CA Article ) (103 Points)

17 September 2011

Hello everyone...

I have a query given below,

Is Service tax is payable on any commission received by TOUR OPERTOR or AIR TRAVEL AGENT from Hotels etc. for taking up their services for Tour Packages?? This is for AY 2011-12.

If Yes, How to calculate the service tax payable??

Discuss with below example

ABC, a Tour operator goes for a tour of 100 people to Australia on 01-09-2010 and taking up a services of Hotel says XYZ for 10 days. On 01-12-2010 ABC received Rs. 100000/- as commission from XYZ. Discuss the service trax chargibility??

Your timely support will be appreciated..

Thanks & Regards,

Hammad

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3 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 17 September 2011

Tour operator service performed partly or wholly outside India is not taxable as it amount to export of services subject to receipt of consideration in FE. Commission received appears to be BAS. Still export of service as recipient of service is situated outside India.

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Mohd. Hammad (CA Article ) (103 Points)
Replied 17 September 2011

Thanks for your reply Mr. Nair??

However in my case, consideration is not received in FE.

Tour Operator takes up corporate tours of Indian companies, hence he is providing the services to Indian company and received consideration in Indian rupee.

But while providing the services of tour operator he receives commission from Hotels in FE. My question is..can service tax leveid on such commission??

What is your answer if commission is received in Indian currency??