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2023 (9) TMI 74 - AT - Service TaxClassification of services - Business Auxiliary Service or not - incentive/commission received by the appellant for using CRS developer - HELD THAT - The said issue has been settled by the Larger Bench of this Tribunal in the case of KAFILA HOSPITALITY TRAVELS PVT. LTD. VERSUS COMMISSIONER, SERVICE TAX, DELHI 2021 (3) TMI 773 - CESTAT NEW DELHI , which has been followed by this Tribunal in the case of M/S. ASVEEN AIR TRAVELS (P) LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI 2022 (4) TMI 1035 - CESTAT CHENNAI , wherein this Tribunal has observed once the IATA agent has discharged his service tax liability in terms of section 67 of the Finance Act or rule 6 (7) of the 1994 Rules, no further service tax could be demanded on the amount paid to or passed on by the IATA agent. The incentive/commission received by the appellant from M/s. Amadeus India Pvt. Ltd. is not liable to tax, in terms of section 65(19) of the Finance Act, 1994 - Appeal allowed - decided in favour of appellant.
Issues involved: Determination of whether the incentive/commission received by the appellant for using CRS developer is subject to service tax.
Summary: The case involved M/s. Nitco entering into an agreement with M/s. Amadeus India Pvt. Ltd. for using the Amadeus CRS system, which acts as an interface between service providers and clients. Show cause notices were issued to M/s. Nitco for service tax on the incentive/commission received from Amadeus. The appellant argued that a previous Larger Bench decision held such incentives not subject to service tax. The Revenue, however, supported the findings of the impugned order. Upon considering the submissions, the Tribunal deliberated on whether the incentive/commission earned by the appellant for using the CRS developer was taxable. The Tribunal referred to the Larger Bench decision in the case of Kafila Hospitality & Travels Pvt. Ltd., which concluded that such incentives are not subject to service tax. The Tribunal noted that the appellant was not promoting the business of airlines or CRS companies, leading to the classification of services under "air travel agent" services rather than Business Auxiliary Services (BAS). In line with the Larger Bench decision and previous Tribunal rulings, it was held that the incentive/commission received by the appellant from M/s. Amadeus India Pvt. Ltd. was not liable to tax under section 65(19) of the Finance Act, 1994. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief. *(Operative part of the order was pronounced in the open Court.)*
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