Arranging Package Tour Can't Be Classified As Tour Operator Service, No Service Tax Payable: CESTAT

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that no service tax is payable on arranging package tours.The bench of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) has observed that the service cannot be classified under Tour Operator Service as arranging the package tour does not involve all the activities that are required to classify the service under Tour Operator Service.The appellant/assessee has submitted that business auxiliary service was confirmed in relation to the activity of commission received towards booking tickets; therefore, the correct classification should be Air Travel Agent Service and not Business Auxiliary Service. Therefore, the demand is not sustainable.The assessee contended that the appellant is only arranging the package tour and not all the activities that are required for classifying the service under Tour Operator Service, such as planning, scheduling, organizing, or arranging tours for individuals and groups. All the activities are not carried out by the appellant; therefore, the service does not fall under the category of tour operator service.The tribunal relied on the decision of the Tribunal in the case of Ram Krishna Travels Pvt. Limited, in which it was held that since planning the package tour does not entail all of the actions necessary to qualify the service under tour operator service, the service is not eligible for this classification.The tribunal noted that the appellant had entertained their bona fide belief that their activity is not liable to service tax; therefore, the demand for the period 2003–2005–2006 raised by the show cause notice dated April 21, 2009 is time barred on the ground of limitation itself. Therefore, the total demand of Rs. 1,92,508 is a time bar as the entire demand is under an extended period. Counsel For Appellant: Jigar ShahCounsel For Respondent: P. GanesanCase Title: Akshar Tours And Travels Versus Case No.: Service Tax Appeal No. 219 Of 2012-DBClick Here To Read The Order

Arranging Package Tour Can't Be Classified As Tour Operator Service, No Service Tax Payable: CESTAT

Mariya Paliwala

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