2020 (1) TMI 1005 - AAR - GST

Classification of services - Ancillary Services provided to various passenger/ tourist on behalf of main tour operators - the Applicant receives service orders from the main tour operator to provide a range of services to the passenger/ tourist. - whether the said service falls under Chapter heading 9985 (i) Supply of Tour Operator Service) or 9985 (iii) Support Services ? - applicable rate of tax. HELD THAT - A gross amount should be charged by the Tour Operator for the entire Tour. In present case, the services provided by the Applicant has various activities like Elephant/ Camel ride, Boat ride, Guide services, local sightseeing, dinner/ lunch at local restaurant etc. For each such service no separate invoice is issued to the tourist and one consolidated bill is raised by the Applicant to the tour operator. The Applicant does not charge for the accommodation and transportation services as the same is not provided by the Applicant. Thus, the applicant does not satisfy the conditions for tour operator and services provided by the applicant cannot be treated as Tour Operator Services in terms of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. The services provided by the supplier are not in the nature of services provided by Tour Operator, the said supply of services cannot be classified under SAC 9985(i) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. The services provided by the applicant are not Tour Operator Service but Support Services classifiable under Serial No. 23 (SAC 9985(iii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and attracts GST @ 18%.

Summary

Issues Involved:
1. Classification of Ancillary Services provided by the applicant.
2. Applicable tax rate for Ancillary Services provided to various tour operators.

Detailed Analysis:

1. Classification of Ancillary Services:
The applicant, engaged in providing 'Tour Operator' and 'Support Services,' sought clarification on whether certain Ancillary Services (e.g., Elephant Ride, Guide Charges, Assistance Charges, etc.) provided to main tour operators fall under the category of 'Tour Operator Services' or 'Support Services' under GST.

The applicant argued that these Ancillary Services are integral to the main tour services and should be classified under Heading 9985(i) as 'Tour Operator Services,' which attracts a GST rate of 5%. The term 'Tour Operator' as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 includes any person engaged in planning, scheduling, organizing, arranging tours, which may include arrangements for accommodation, sightseeing, or other similar services by any mode of transport.

However, the jurisdictional officer opined that the services supplied fall under SAC heading 9985(ii) as 'Support Services,' attracting a GST rate of 18%.

2. Applicable Tax Rate for Ancillary Services:
The ruling emphasized that the definition of 'Tour Operator' necessitates the inclusion of transportation services. The applicant's services, which include sightseeing and other similar services but exclude transportation and accommodation, do not meet the criteria for 'Tour Operator Services.' Therefore, the services provided by the applicant cannot be classified under SAC 9985(i) but rather under SAC 9985(iii) as 'Support Services.'

The relevant portion of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 was examined, which specifies that to qualify as 'Tour Operator Services,' the bill must be inclusive of accommodation and transportation charges, and credit of input tax charged on goods and services used in supplying the service must not be taken, except for input services in the same line of business.

Since the applicant does not provide transportation and accommodation services and does not issue a consolidated bill inclusive of these charges, the services provided do not satisfy the conditions for 'Tour Operator Services.'

Conclusion:
The Authority for Advance Ruling concluded that the Ancillary Services provided by the applicant to various tour operators fall under Chapter heading 9985(iii) as 'Support Services' and not as 'Tour Operator Services.' Consequently, the applicable rate of GST for these services is 18% (SGST 9% + CGST 9%).

Ruling:
a. The Ancillary Services provided by the applicant to various tour operators fall under Chapter heading 9985(iii) {Support Services} of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 (as amended).
b. The applicable rate of GST for Ancillary Services provided by the applicant to various tour operators is 18% (SGST 9% + CGST 9%).