Board clarifies the issue of Inclusion of YQ and YR charges in the Taxable Value of Services Provided by Aircraft Operator - Service Tax - F. No. 341/52/2006-TRU

Board clarifies the issue of Inclusion of YQ and YR charges in the Taxable Value of Services Provided by Aircraft Operator F. No. 341/52/2006-TRU The Central Board of Excise Customs (CBEC) has clarified the issue of Inclusion of YQ and YR charges in taxable value of services provided by aircraft operator to passenger embarking in India for international journey. In its letter F. No. 341/52/2006-TRU, dated 18.09.2007, issued to the Chairman, Board of Airline Representative in India, the Board has clarified that YQ and YR charges collected by the Airlines from the passengers are includible in the value of taxable service provided by aircraft operator to passenger embarking in India for international journey. The clarification reads as under "As per section 67 of the Finance Act, 1994, value of a taxable service shall be the gross amount charged by the service provider for the services provided and includes any amount received towards the taxable service before, during or after provision of such service. Provisions relating to determination of the value of taxable service contained in Service Tax (Determination of Value) Rules, 2006 are clear and unambiguous. As YQ and YR charges are integral part of the consideration received for the services provided, method of vivisecting may not be of any relevance as long as the amount is in the nature of the consideration paid for the services provided."