2018 (2) TMI 1324 - AT - Service Tax

Liability of service tax - discount - sub-agent of IATA agents - Held that - this Tribunal in Trade Wings Ltd s case 2017 (9) TMI 257 - CESTAT NEW DELHI taking into consideration the fact that the nature of transaction between the registered IATA Agents and the subsequent sub-agent, is that of sale and purchase, and accordingly, held that service tax is not required to be paid by the said sub-agent on the discount received - demand set aside. Business Auxiliary Services - software of computer reservation system provided by Gallilieo - Extended period of limitation - Held that - this Tribunal has already decided the issue 2018 (2) TMI 648 - CESTAT AHMEDABAD , which is against the appellant - the demand in the case of show cause notice dated 23.09.2010, being issued invoking extended period of limitation on the said issue, therefore, as held in the order, it should be restricted to normal period of limitation. Appeal disposed off.

Summary

Issues:
Three appeals against orders-in-appeal involving a common issue of service tax liability on discounts and incentives received by the appellants.

Analysis:
The appellants, registered as service providers under Air Travel Agent Service, faced demands for service tax on discounts from Air Travel Agents and incentives from software developers. The Tribunal considered the nature of transactions and held that service tax on discounts is not required as it involves sale and purchase, not promotion. Referring to Trade Wings Ltd. case, the Tribunal emphasized that the appellants were not acting as commission agents but engaging in ticket sales. On the issue of incentives from software developers, the Tribunal relied on Ram Krishna Travels Pvt Ltd. case and D-paul's case to conclude that the appellants' services fell under Business Auxiliary Service, subject to service tax. The Tribunal noted the clarification in the Budget 2016-17 regarding incentives received by Air Travel Agents, further supporting the levy of service tax. The demands related to the first issue were set aside, and on the second issue, the demand was restricted to the normal period of limitation. No penalty was imposed, and the matters were remanded for computation. The impugned orders were modified accordingly, and the appeals were disposed of based on the judgments cited.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the legal reasoning behind the decision on each issue involving service tax liability on discounts and incentives received by the appellants. The Tribunal's reliance on precedents and statutory provisions demonstrates a thorough consideration of the facts and legal principles involved in determining the taxability of the transactions in question.