Service tax on hotel bookings

Ritesh (Financial Controller) (51 Points)

05 March 2010  

Dear experts,

This query is specifically meant on issue of paying service tax under reverse charge mechanism on commission charged to us by foreign operators for hotel accommodation.

Please note that the foreign tour operator does not provide us with any invoices but commission is paid on basis of an agreement.  Further it is also pertinent to note that as per definition of tour operator it includes person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 (59 of 1988) or the Rules made there under.

Query

1.     Whether we can claim services rendered by foreign tour operator cannot be included in the category of Tour operator?

2.     Whether commission charged for hotel accommodation chargeable under category of Tour operators?

Require your assistance asap.