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2024 (12) TMI 1304 - AT - Service TaxLevy of service tax on the services of Tour Operator provided for Haj and Umrah - HELD THAT - The issue with regards to levy of service tax in respect of these services for the period post introduction of Negative List concept for levy of service tax (i.e. from 01.07.2012) is no longer res-integra and has been decided by Hon ble Supreme Court in the case of ALL INDIA HAJ UMRAH TOUR ORGANIZER ASSOCIATION MUMBAI VERSUS UNION OF INDIA ORS. 2022 (7) TMI 1233 - SUPREME COURT . In view of the above decision, the dispute with regards to applicability of service tax (post 01.07.2012) in respect of these services provided by private tour operator in respect of Haj and Umrah has been settled against the appellant. Hon ble Supreme Court has also held that these services provided by the private tour operators are not exempted by the Mega Exemption Notification. Conclusion - The demand of service tax on tour operator services for Haj and Umrah confirmed, while allowing the small scale exemption - there are no merits in the impugned order and set aside the same. Appeal filed by the revenue is allowed.
Issues Involved:
1. Applicability of Service Tax on Tour Operator Services for Haj and Umrah. 2. Demand of Service Tax on Legal Consultancy Services. 3. Eligibility for Small Scale Exemption for Travel Agent and Business Auxiliary Services. 4. Imposition of Interest and Penalty under the Finance Act, 1994. Issue-wise Detailed Analysis: 1. Applicability of Service Tax on Tour Operator Services for Haj and Umrah: The primary issue was whether the services provided by private tour operators for Haj and Umrah are liable for service tax post the introduction of the Negative List regime on 01.07.2012. The Tribunal referred to the Supreme Court judgment in the case of All India Haj Umrah Tour Organizer Association, which clarified that service tax is applicable to services provided by private tour operators for Haj and Umrah as these services are not exempted under the Mega Exemption Notification. The Supreme Court distinguished between services provided by the Haj Committee, which are exempt, and those by private operators, which are not, due to the lack of a profit motive and statutory duties associated with the Haj Committee. 2. Demand of Service Tax on Legal Consultancy Services: The Tribunal examined the demand for service tax on legal consultancy services amounting to Rs. 8413/-. The appellant contended that payments were made to a Chartered Accountant, not an advocate, and no evidence was provided to show otherwise. Consequently, the Tribunal found no grounds to levy service tax on these payments as legal consultancy services. 3. Eligibility for Small Scale Exemption for Travel Agent and Business Auxiliary Services: The Tribunal evaluated whether the appellant was eligible for small scale exemption, noting that the aggregate amounts received for Travel Agent services and Business Auxiliary Services did not exceed the threshold of ten lakh rupees in any financial year. Therefore, the appellant was eligible for the small scale exemption under the relevant notification, which exempts service providers with a turnover below a specified amount. 4. Imposition of Interest and Penalty under the Finance Act, 1994: The Tribunal addressed the imposition of interest and penalties under Sections 75 and 78 of the Finance Act, 1994. The original authority had imposed penalties on the grounds of suppression of facts and deliberate evasion of service tax. The Tribunal, however, found that the appellant had not challenged the amounts detailed in the show cause notice and that the services were taxable. The Tribunal upheld the imposition of interest and penalties as justified under the provisions of the Finance Act, 1994, citing the Supreme Court's stance that penalties are mandatory in cases of suppression and evasion. Conclusion: The Tribunal set aside the impugned order of the Commissioner (Appeals) and restored the order of the Original Authority, confirming the demand of service tax on tour operator services for Haj and Umrah, while allowing the small scale exemption for other services and upholding the imposition of interest and penalties. The appeal filed by the revenue was allowed, and the order of the Original Authority was reinstated.
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