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2023 (9) TMI 74 - AT - Service Tax


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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