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Service tax rate

bobbiligangannnaidu (M.Com) (40 Points)

29 October 2012

what is the Service tax rate of Air Travel Agent ? as per Finance Act, 1994

please give me answer my question.

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3 Replies

Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14497 Points)
Replied 29 October 2012

What is the value of taxable service in case of air travel agent?

In case of air travel agent, the value of taxable service is the gross amount charged by such agent from the customer for services in relation to the booking of passage for travel by air excluding the air fare but including the commission, if any received from airline in relation to such booking.

The air travel agents receive certain commission for domestic tickets and for international tickets from the airlines. The details of the commissions payable by the airlines is indicated in the agency agreement entered into between the air line and the air travel agent. The travel agent files a fortnightly return to the airlines indicating the details of tickets booked, the fare collected, the commission earned along with other particulars. After adjusting the commission, he remits the balance amount to the air lines. This fortnightly return would be the basis for assessment of Service Tax in respect of air travel agents. However, an option has been given to the air travel agents to pay the Service Tax at the rate of 0.25% of the basic fare in the case of domestic tickets and 0.5% of the basic fare in the case of international tickets towards discharge of their Service Tax liability instead of paying tax at the rate of 5% on the actual commission received from the air lines. The basic fare is defined as that part of the fare on which commission is payable by the air lines.

service tax on taxable value @ 12%+Edu. Cess 2% + S&H Cess 1%

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CA Pooja Agarwal (Chartered Accountant) (3228 Points)
Replied 29 October 2012

its 0.6% plus cess in case of domestic bookings and 1.2% of basic fare for international bookings

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Anbuselvam (CMA Final Pursuing) (240 Points)
Replied 30 October 2012

The air travel agent has an option to pay service tax @ 0.60% of basic fare in case of domestic booking and @ 1.20% of the basic fare in case of international bookings, of passage for travel by air. In addition, education cess @ 2% and SAH education cess @ 1% will be payable.

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