2024 (6) TMI 444 - AT - Service Tax

Classification of service - short-term accommodation service or tour operator service - entitlement of abatement under notification dated 20.06.2012 (from 01.07.2012) in respect of service of tour operator and claim abatement of 90% on gross amount charged - invocation of section 73A of the Finance Act, 1994 and requiring the appellant to pay the alleged taxes collected from the customers and passed on to the hotels for their payment of tax under hotel accommodation services - provisions of section 73 and section 73A of the Finance Act can be simultaneously invoked or not - correctness of demanding amount from the appellant under section 73A of the Finance Act in respect of cases where the customers stay in hotels having tariff value of less than Rs. 1000 per day or cases where the hotels are located in the State of Jammu Kashmir - statement for subsequent period can be issued for demand under section 73A or under section 73(1A) of the Finance Act - invocation of extended period of limitation for recovery of tax under the proviso to section 73(1) of the Finance Act and under section 73A of the Finance Act - imposing penalty on the appellant and its officials. HELD THAT - The factual position and the issues in the decision of the Tribunal in M/S MAKE MY TRIP (INDIA) PRIVATE LIMITED, SHRI M.K. PALLAI, VICE PRESIDENT (FINANCE) AND SHRI MOHIT KABRA, GROUP CFO DIRECTOR M/S MAKEMY TRIP (INDIA) PRIVATE LIMITED VERSUS ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF GST INTELLIGENCE, NEW DELHI 2024 (1) TMI 681 - CESTAT NEW DELHI and the present appeals are identical where it was held that as follows '(i) That renting of hotel accommodation service can only be provided by a hotel. Make My Trip, did not qualify as a hotel and could, therefore, not render the service of renting of rooms in a hotel; (ii) That Make My Trip merely acted as a facilitator between the customer and the hotel permitting the booking of hotel rooms. For this, Make My Trip received commission; (iii) That Make My Trip qualified as a tour operator and, therefore, on the service of booking of accommodation of service, Make My Trip was entitled for the benefit of abatement; and (iv) That the taxes collected by Make My Trip were paid to the hotels for further remittance. Hence, section 73A of the Finance Act could not be invoked.' Thus, in view of the decision of the Tribunal in Make My Trip, the impugned order passed by Additional Director deserves to be set aside and is set aside - The appeals are, accordingly, allowed.

Summary

Issues Involved:
1. Classification of services provided by the appellant.
2. Entitlement to abatement as a tour operator.
3. Invocation of section 73A of the Finance Act.
4. Simultaneous invocation of sections 73 and 73A.
5. Demand under section 73A for specific cases.
6. Issuance of statement for subsequent period under section 73A or 73(1A).
7. Invocation of the extended period of limitation.
8. Imposition of penalty on the appellant and its officials.

Summary:

Issue 1: Classification of Services
The Tribunal held that the appellant, M/s. Make My Trip (India) Private Limited, was not providing short-term accommodation service but acted as a facilitator between the customer and the hotel, receiving commission for the same. The appellant did not qualify as a hotel and could not render the service of renting of rooms in a hotel.

Issue 2: Entitlement to Abatement
The Tribunal found that the appellant qualified as a tour operator and was entitled to abatement under the notification dated 20.06.2012, allowing a 90% abatement on the gross amount charged.

Issue 3: Invocation of Section 73A
The Tribunal held that the taxes collected by the appellant were paid to the hotels for further remittance, and hence, section 73A of the Finance Act could not be invoked.

Issue 4: Simultaneous Invocation of Sections 73 and 73A
The Tribunal did not find any justification for the simultaneous invocation of sections 73 and 73A of the Finance Act.

Issue 5: Demand under Section 73A for Specific Cases
The Tribunal ruled that the department was not right in demanding amounts under section 73A for cases where the customers stayed in hotels with a tariff value of less than Rs. 1000 per day or where the hotels were located in Jammu & Kashmir.

Issue 6: Issuance of Statement for Subsequent Period
The Tribunal did not support the issuance of statements for the subsequent period under section 73A or section 73(1A) of the Finance Act.

Issue 7: Invocation of Extended Period of Limitation
The Tribunal found that the department was not justified in invoking the extended period of limitation for recovery of tax under the proviso to section 73(1) and section 73A of the Finance Act.

Issue 8: Imposition of Penalty
The Tribunal concluded that the imposition of penalties on the appellant and its officials was not justified in the facts and circumstances of the present case.

Conclusion:
The Tribunal set aside the impugned order dated 28.09.2021 passed by the Additional Director and allowed the appeals filed by the appellant and its officials. The decision was based on the earlier Tribunal ruling in M/s. Make My Trip (India) Private Limited vs. Additional Director General, Directorate General of GST Intelligence, New Delhi [2024 (1) TMI 681 - CESTAT New Delhi].