A Tour Operator means any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1958 or the Rules made thereunder.

The above new definition was notified w.e.f. 16.10.98. Prior to the amendment, only the tour operators who were operating tourist vehicles, with permit and which were owned by them, were covered under the ambit of Service Tax. However, with the change, even ‘non permit holders’ who operate as tour operators by using tourist vehicles, which may have been leased or hired from persons who hold tourist permits, are also covered under the definition of tour operator and are liable to pay Service Tax. 

What is the taxable service provided by a Tour Operator ?

Taxable service means the service provided to any person, by a tour operator in relation to a tour.

What is the value of taxable service provided by a tour operator ?

The value of taxable service provided by a tour operator to a client, is the gross amount charged by such operator from the client for services in relation to a tour and includes the charges for any accommodation, food or any other facilities provided in relation to such tour.

Are the services provided by Tour Operators exempted from payment of Service Tax ?

The services provided by Tour Operators were exempted from payment of Service Tax upto 31.03.2000 by virtue of Notfn.No.52/98-ST. dt. 18.07.1998. However, since this notification has not been renewed; the services of tour operators have again become liable to Service Tax w.e.f. 01.04.2000.