2014 (8) TMI 826 - AT - Service Tax

Tour operator service - Whether the activity of providing services in relation to outbound tours, i.e. tours in locations outside the territory of India, including the operation of tours and the planning, scheduling, organising or arranging of such tours, falls within the ambit of tour operator service and is consequently subject to levy and collection of service tax - Held that - As a consequence of the interpretation of tour operator vide a , where a person pursues a composite activity of operating tours and the planning, scheduling, organizing or arranging of such tours, by a mode of transport other than by a tourist vehicle (covered by a permit issued under the provisions of the Motor Vehicles Act, 1988 or the Rules made thereunder), such activity falls outside the scope of the definition of tour operator Following decision of M/s Cox & Kings India Ltd., M/s Travel Corporation of India Ltd. and M/s Swagatam Tours Pvt. Limited Versus CST, New Delhi 2013 (12) TMI 1024 - CESTAT NEW DELHI - Decided in favour of assessee.

Summary

Issues Involved: Taxability of outbound tours under the scope of "Tour Operator Service" under Section 65 (115) of the Finance Act.

Detailed Analysis:

1. Common Issue and Appeals: The appeals were filed against orders confirming demand of service tax, interest, and penalties for not paying appropriate service tax as a provider of "Tour Operator" service.

2. Contention of Appellant: The appellant argued that the dispute pertained only to outbound tours. They cited a Tribunal decision in a similar case where the Tribunal ruled in their favor, indicating that the issue was settled. Hence, they contended that the demands were not sustainable.

3. Revenue's Submission: The Revenue relied on lower authorities' findings and argued that even in a previous case, the Tribunal ruled in favor of Revenue, stating that planning and scheduling of tours fall under the taxable service of "Tour Operator."

4. Taxability of Outbound Tours: The key issue in these appeals was the taxability of outbound tours under the definition of "Tour Operator Service" as per Section 65 (115) of the Finance Act. The Tribunal's decision in the case of M/s. Travel Corporation of India Ltd. clarified this issue.

5. Tribunal's Ruling: The Tribunal's ruling highlighted that the definition of "Tour Operator" involves planning, scheduling, organizing, or arranging tours by any mode of transport. It differentiated between the activity of operating tours and the planning aspect. It concluded that the consideration received for operating and arranging outbound tours consumed beyond India's territory is not liable for service tax.

6. Additional Conclusions: The Tribunal further clarified that planning and scheduling of outbound tours could be considered incidental activities, but organizing and arranging these tours are the primary purposes falling within the taxable service definition. The ruling also addressed issues related to export of service, abatement benefits, limitation period for assessment, and imposition of penalties.

7. Decision and Outcome: Since the Tribunal had already settled the issue, the appeals were allowed in line with the decision in the case of M/s. Travel Corporation of India Ltd., setting aside the impugned order. The imposition of penalties was deemed unjustified.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, the Tribunal's ruling, and the final decision on the taxability of outbound tours under the "Tour Operator Service" category.