||Who is an Air Travel
|| Air Travel Agent is
a person engaged in providing any service connected with the
booking of passage for travel by air.
||What is taxable service
for an air travel agent?
|| In case of air travel
agent, the taxable service is the service provided to the customer
in relation to the booking of passage for travel by air.
||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.
|| What is the procedure
to be followed for getting refund of Service tax in cases where
the ticket booked is cancelled at a later stage?
|| Cancellation or modification
of tickets is a common and frequent feature in air travel. The
air travel agent in his fortnightly return gives the particulars
of tickets cancelled or modified and adjusts the commission
accordingly subject to final approval by the airlines. Since
the commission is adjusted automatically and the Service Tax
is paid on the net commission received, the question of separately
claiming refund of Service Tax may not arise.
|| Is the service provided
by Air Travel Agent in relation to the booking of passage for
travel by air to U.N or International organisation or the Diplomatic
Missions exempted from payment of service tax?
| Yes. The service provided
by an air Travel Agent in relation to the booking of passage
for travel by air to UN, other international organisation as
well as certain specified Diplomatic Missions are exempted from
payment of Service Tax. ( Refers Notification No. 51/98 Service
Tax dated 15.06.98)
|| If tickets are issued
against international credit card, whether the Air Travel Agent
is required to pay Service Tax on such services provided to
the International Card holder irrespective of the fact whether
he or she is an Indian, NRI or Foreigner ?
|| Card, they would be
responsible for payment of the Service Tax to the Govt. irrespective
of the fact the receiver of the service, i.e international credit
card holder is an Indian or NRI or Foreginer.
|| Would Service Tax
be chargable on modification charges recovered by the Air Travel
|| The value of taxable
service in relation to service provided by an Air Travel Agent
to a customer is the gross amount charged by such agent from
the customer. The modification charges recovered by the Air
Travel Agent are included in the gross amount charged from the
customer. Hence, these are chargeable to service tax.