Composite Rate of Tax - Air Travel Agent - Service Tax Practice Manual / Ready Reckoner - Service Tax

Composite Rate of Tax on Booking of Tickets By Air Travel Agent Rule 6(7) of Service Tax Rules, 1994 Two option available to air travel agent to pay service tax on tickets booked under rule 6(7) and section 66B. OPTION A: Composite Rate of tax shall as follows: [ rule 6(7) of Service Tax Rules, 1994] 0.7% of the basic fare, in case of domestic tickets. 1.4% of the basic fare in case of international tickets. Thus, tax will be the amount as ascertained by applying above rates. OPTION B : Rate of tax as per section 66B, shall be @ 14% on the actual commission received from the airlines. Explanation . - For the purposes of this sub-rule, the expression basic fare means that part of the air fare on which commission is normally paid to the air travel agent by the airline.