2018 (2) TMI 1853 - AT - Service Tax

Classification of services - tour operator services or not - respondents are providing boarding and lodging to the tourists on direct booking or on the request of the tour operators - Held that - In the instant case, the respondents are providing the accommodation on the request of the tour operators or sometime on direct reservations. They are not providing transportation nor providing the contract carriage. They are not holding the stage carriage permits. Their activities are confined to the boat in the water. The boat operators have not control over the schedule of the guests. They are not providing any guidance or planning for the stay in Kerala. The boat can be considered as a hotel in the water. Certainly, the House Boat Owner cannot be considered as a tour operator for the reasons that they are not carrying the guests/ tourists from one place to another in the State - appeal dismissed - decided against Revenue.

Summary

Issues:
Department appealing against Order-in-Appeal, classification of respondents as tour operators, interpretation of 'Tour Operator' under Section 65(113) of Finance Act, 1994.

Analysis:
The case involved appeals by the Department against Order-in-Appeal Nos. 116 to 124/2008-S.T., dated 30-6-2008. The respondents, house boat owners registered under the Kerala Tax on Luxuries Act, 1976, provided boarding and lodging services to tourists. The Department considered them as tour operators, demanding Service Tax. However, the Commissioner (Appeals) ruled in favor of the respondents, stating they were not tour operators. The Department then filed appeals against this decision.

Upon hearing all parties and examining the record, the Tribunal considered the definition of 'Tour Operator' under Section 65(113) of the Finance Act, 1994. The definition includes persons engaged in planning, organizing, or arranging tours, which may involve accommodation and other services. In this case, the respondents provided accommodation to tourists on direct booking or through tour operators, without offering transportation services or holding necessary permits. Their activities were limited to the boat itself, similar to a hotel on water. The Tribunal concluded that the respondents, as 'House Boat Owners,' did not meet the criteria to be classified as tour operators under the law.

Based on the above analysis, the Tribunal found no grounds to overturn the Commissioner (Appeals)' decision, which was upheld along with the reasons provided. Consequently, the Department's appeals were rejected. The order was pronounced and dictated in open court on 8-2-2018.