2022 (4) TMI 933 - AT - Service Tax

Levy of Service Tax - Tour Operator Service - amount collected as entry fee canter ride museum and hathi safari charges and short term accommodation - HELD THAT - The appellant is a Government Authority under the relevant Wild Life Law. Further the Authority is rendering statutory activities or services under various Government orders under the relevant statutes. It is also noticed that the appellant is depositing all the money collected for whatever charges from the visitors in the Government Exchequer. Thus the activities of the appellants are exempted from the levy of service tax under Section 66 D (a) read with Mega Exemption under Notification No.25/2012-ST as amended read with TRU Clarification dated 28.02.2015. The appeal is allowed.

Summary

Issues:
1. Whether the appellant, a Chief Conservator of Forest, is liable to pay service tax for providing tour operator services and short-term accommodation services.

Analysis:
1. The appellant, a Chief Conservator of Forest, was issued a show cause notice for a service tax demand of &8377; 41,50,631 for the period April 2014 to March 2015. The notice alleged that the appellant was engaged in tour operator services by organizing tours for tourists visiting Corbett National Park and providing short-term accommodation in forest rest houses. The Revenue claimed that these activities fell under the category of "Tour Operator Service" and were taxable under the Finance Act, 1994.

2. The appellant contested the notice, arguing that they only collected entry fees and were not involved in planning or organizing tours. They highlighted that the visit to Corbett Tiger Reserve was based on entry fees predetermined by the Government and that the activities were in compliance with statutory provisions. The appellant also pointed out that the fees collected were deposited in the Government exchequer as per statutory requirements.

3. The Adjudicating Authority held that the appellant was liable to pay service tax for providing tour operator services and short-term accommodation. The Authority differentiated between fees collected for entry to museums and national parks (exempted) and charges for activities like canter rides and short-term accommodation (taxable). The appellant was directed to pay service tax amounts totaling &8377; 17,80,118 for the period in question, along with penalties and interest.

4. The appellant appealed to the Commissioner (Appeals), who upheld the Authority's decision. The Commissioner noted that entities like 'Kumaon Mandal Vikas Nigam' and 'Garhwal Mandal Vikas Nigam' were paying service tax for similar services, indicating liability for the appellant as well.

5. The Tribunal, after considering the arguments, held that the appellant, as a Government Authority under wildlife laws, was engaged in statutory activities as per Government orders. The Tribunal observed that the appellant deposited all collected funds into the Government exchequer and that their activities were exempted from service tax under relevant provisions. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and granting the appellant consequential benefits.