Air Travel Agent means any person engaged in providing any services connected with the booking of passage for travel by air.
In this context we provide you with the following details regarding the taxability of this serviceâ€“
Date from which such service is taxable â€“ 1st July, 1997
Service provider – An air travel agent
Service receiver â€“ Any person
Scope of taxable services – Any service provided or to be provided to any person, by an air travel agent in relation to booking of passage for travel by air is a taxable service.
The services relating to booking of passage by air are taxable. Other services like hotel booking, local transportation are not taxable.
Points to be kept in mind â€“
- The value of taxable services will include the commission received by the travel agent from the airline. However, service tax is not payable on the fare collected by air travel agents.
- The portion of the value of taxable service which is in excess of the commission received by the air travel agent from the airline for booking of passage for travel by air is exempt from service tax payment.
- 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.
- For the purpose of the above option, â€œbasic fareâ€ means that part of air fare on which commission is normally paid by airline to the air travel agent.
- If there are cancellations, the commission is adjusted. Hence, self adjustment of commission can be done from tax payable for subsequent periods, where it was held that cancellations are common feature in air travel. Commission gets adjusted automatically in fortnightly return. Hence, filing refund claim is not required.