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TMI Blog2021 (3) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... nes? - HELD THAT:- For an activity to be considered as promotional, it is necessary that a service provider must promote or endorse the service of the client. It has, therefore, to be seen whether in the present case the travel agent is encouraging a passenger to purchase a ticket of a particular airline. The facts reveal that the travel agent is only providing options to the passenger and it the passenger who determines the airline for travel. It is only when the target of having achieved the pre-determined number of bookings is achieved that the airline pays an incentive to the travel agent. It cannot, therefore, be said that the travel agent is promoting the services of any airline. Incidentally, the airlines may benefit if more tickets are sold, but this would not mean that the travel agent is providing a service for promoting the airlines - by rendering of services connected to travel by air, a travel agent would render air travel agent services, which services cannot be said to be for promotion or marketing for the airlines. Whether the air travel agent is promoting the business of CRS companies? - HELD THAT:- Mere selection of software or exercising of a choice would not res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) of the 1994 Rules, no further service tax could be demanded on the amount paid to or passed on by the IATA agent. Application disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... anies for access to the portals. However, due to increasing competition in the market, the CRS Companies stopped charging the agents for booking through the portal and instead, in order to increase the flow of business, the CRS Companies started to part with a portion of their consideration (charges/commission) and paid the same to the IATA agents when the agents achieve a minimum quantum of bookings through the concerned CRS portal. This incentive is normally termed as 'CRS commission'. The three CRS Companies involved are Amadeus India Private Limited, Amadeus, Interglobe Technology Quotient Pvt. Ltd., Galileo and Abacus India, Abacus. 5. A show cause notice dated October 21, 2011 covering the period 2005-06 to 2009-10 was issued to the appellant as the Department sought to levy service tax on the following :- (i) Target based incentives paid to the travel agents, under the category of 'business auxiliary service' ('BAS') by alleging that the travel agents are promoting and marketing the business of the airlines; and (ii) CRS commission paid by the CRS Companies to travel agents under the category of BAS by alleging that the travel agents are promoting and marketing the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there is no dispute that the noticee has purchased Air Ticket for its clients from the other IATA agents who for booking the tickets gets commission from the concerned Airlines. I observe that on each and every purchase of Air Tickets the ratio of the commission of the other IATA agents does increase and so the interest of the other IATA agents are also promoted and that is why the other IATA agents share the said commission with the noticee. Therefore, there remains no iota of doubt that the noticee has promoted the business of other IATA agents and received the commission against such promotional activity during the period under dispute which is appropriately covered and taxable under "Business Auxiliary Services" as defined in Section 65(19)(ii) as "Promotion or marketing of service provided by the client; or" read with section 65(105)(zzb) of the Act and I hold it accordingly." 9. The Commissioner, thereafter, by order dated May 16, 2013, confirmed the demand of service tax by invoking the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. 10. At the time of hearing of the appeal before the Division Bench, the learned Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with a similar prayer stating that it proposes to file an appeal against the order dated February 10, 2021 passed by the Principal Commissioner, in which same issues are involved. 13. The intervention applications have been opposed by Shri Suresh Merogu learned Authorized Representative of the Department at Mumbai and Shri Rajesh Rai and Shri Vijay Kumar Gupta, learned Authorized Representatives of the Department at Chandigarh. They have submitted that only some of the issues referred to the Larger Bench arise for consideration in the pending appeals and in any view of the matter, the parties would have an opportunity to raise all the issues before the Division Benches at the time when these appeals are heard. Learned Authorized Representatives also pointed out that there is no procedure prescribed for intervention before a Larger Bench of the Tribunal and in support of this contention reliance has been placed upon the decision of a Larger Bench of the Tribunal in Subhash Projects & Marketing Ltd. vs. Commissioner of Customs, Cochin, 2009 (239) E.L.T. 440 (Tri.-LB). 14. Shri J.P. Singh, Shri Vivek Pandey and Shri R.K. Maji, learned Authorized Representatives of the Department at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration in these appeals. Any decision taken by the Larger Bench on these six issues that have been framed would necessarily have an impact on the appeals pending before the Division Benches. The submission made by learned Authorized Representatives of the Department that only some of the issues referred to the Larger Bench may be involved in the appeal cannot be a ground to reject the intervention application. The Division Benches of the Tribunal would be bound by the decision of the Larger Bench on these issues. This will, therefore, not be a good reason to deny an opportunity to the applicants to make submissions before the Larger Bench. 18. The second objection raised by the learned Authorized Representatives of the Department is that the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules 1982 do not provide for moving an intervention application. As noticed above, any decision taken by the Larger Bench on the issues referred to it would bind the Division Benches when the appeals filed by the applicants are heard. Rule 41 of the aforesaid 1982 Rules confers power on the Tribunal to make such orders or such direction as may be necessary to secure the ends of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to invocation of the extended period of limitation is concerned. 3. The appeal is disposed of in the above terms." 24. It needs to be noted that the Division Bench of the Tribunal in D. Pauls had not examined whether the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act was correctly invoked. It appears that it is for this reason than when the appeal came up for hearing before the Supreme Court, the learned counsel for the appellant prayed for permission to move the Tribunal for reconsideration of the impugned order in so far as the invocation of the extended period of limitation was concerned, for if this issue is decided in favour of the appellant, it would not be necessary for the Supreme Court to examine the merits of the order passed by the Tribunal in D. Pauls. The Supreme Court granted permission to the appellant to move the Tribunal and accordingly, disposed of the Civil Appeal. 25. An appeal lies to the Supreme Court against the decision of the Tribunal and an appeal was filed, though with a delay which was condoned by the Supreme Court. The Supreme Court merely granted permission to the appellant to move the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court to entertain a review petition is lost. 28. It is on the basis of the aforesaid principles of law laid down by the Supreme Court that the learned Authorized Representatives submitted that since an appeal was provided against the order of the Tribunal to the Supreme Court and the Supreme Court disposed of the appeal, the order of the Tribunal would merge in the order of the Supreme Court and so the reference before the Larger Bench, doubting the correctness of the decision of the Tribunal, would not be maintainable. 29. The issue that would arise for consideration is whether the reasoning given by the Tribunal merged in the order of the Supreme Court or only the operative part of the order of the Tribunal merged in the order of the Supreme Court upon disposal of the Civil Appeal by the Supreme Court. 30. It needs to be noted that Justice R. C. Lahoti (as His Lordship then was) had observed in Kunhayammed, which was decided on July 19, 2000, that the decision of the High Court or the Tribunal would merge in the order of the Supreme Court upon dismissal of the Civil Appeal, but subsequently in 2002, His Lordship in S. Shanmugavel Nadar vs. State of Tamil Nadu and Anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier Division Bench of the High Court in Pillai and, therefore, referred the matter to a Full Bench of the High Court. When the Full Bench of the High Court took up the hearing of the writ petitions, the aforesaid order of the Supreme Court dated September 10, 1986 was brought to its notice. The Full Bench held that since the appeal against the decision of the Division Bench in Pillai was dismissed by the Supreme Court, the decision of the High Court merged in the order of the Supreme Court and so the Full Bench could not examine the correctness of the law laid down by the Division Bench in Pillai. 32. It is against the aforesaid decision of the Full Bench that appeals were filed by Special Leave before the Supreme Court. The Supreme Court noted that the earlier order dated September 10, 1986 of the Supreme Court did not go into the question of constitutional validity of Act No. 13 of 1960 nor did the Supreme Court apply its mind to the correctness or otherwise of the view taken by the High Court in Pillai. The Supreme Court also noted that the appeals had been dismissed as not properly constituted and hence incompetent as the State of Tamil Nadu, which was a necessary part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew petition after the dismissal of an Appeal by the Supreme Court. A review petition would not be maintainable before the High Court after the dismissal of the Appeal by the Supreme Court, but the decision can be reconsidered by a Larger Bench of the High Court if the Supreme Court had not adjudicated on the merits of the order of the High Court. The Supreme Court, therefore, set aside the order of the Full Bench of the High Court and restored the appeal before the Full Bench to be heard and decided in accordance with law. The relevant portion of the judgment of the Supreme Court is reproduced below :- "10. Firstly, the doctrine of merger. Though loosely an expression merger of judgment, order or decision of a court or forum into the judgment, order or decision of a superior forum is often employed, as a general rule the judgment or order having been dealt with by a superior forum and having resulted in confirmation, reversal or modification, what merges is the operative part, i.e. the mandate or decree issued by the Court which may have been expressed in positive or negative forum. For example, take a case where the subordinate forum passes an order and the same, having been dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that the decision of this Court dated 10.9.1986 had the effect of resulting in merger into the order of this Court as regard the statement of law or the reasons recorded by the Division Bench of the High Court in its impugned order. The contents of the order of this Court clearly reveal that neither the merits of the order of the High Court nor the reasons recorded therein nor the law laid down thereby were gone into nor they could have been gone into. 12. Thirdly, as we have already indicated, in the present round of litigation, the decision in Varadaraja Pillai's case was cited only as a precedent and not as res judicata. The issue ought to have been examined by the Full Bench in the light of Article 141 of the Constitution and not by applying the doctrine of merger. Article 141 speaks of declaration of law by the Supreme Court. For a declaration of law there should be a speech, i.e., a speaking order. In Krishen Kumar v. Union of India and Ors., [1990] 4 SCC 207, this Court has held that the doctrine of precedents, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. In State of U.P. and Anr. v. Sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. When no reason are given, a dismissal simpliciter is not a declaration of law by the Supreme Court under Article 141 of the Constitution. In Indian Oil Corporation Ltd. v. State of Bihar and Ors., AIR (1986) SC 1780 this Court observed that the questions which can be said to have been decided by this Court expressly, implicitly or even constructively, cannot be re-opened in subsequent proceedings; but neither on the principle of res judicata nor on any principle of public policy analogous thereto, would the order of this Court bar the trial of identical issue in separate proceedings merely on the basis of an uncertain assumption that the issues must nave been decided by this Court at least by implication. ******* 14. It follows from a review of several decisions of this Court that it is the speech, express or necessarily implied, which only is the declaration of law by this Court within the meaning of Article 141 of the Constitution. xxxxxxxxx xxxxxxxxx xxxxxxxxx 16. In the present case, the order dated 10.9.1986 passed by this Court can be said to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Supreme Court the decision of the High Court was no longer available to be reviewed. We need not here go into the question, whether it was a case of review, or whether the review application should have been filed in the High Court or Supreme Court. Such a question is not arising before us. 19. Under Article 141 of the Constitution, it is the law declared by the Supreme Court, which is binding on all Courts within the territory of India. Inasmuch as no law was declared by this Court, the Full Bench was not precluded from going into the question of law arising for decision before it and in that context entering into and examining the correctness or otherwise of the law stated by the Division Bench in M. Varadaraja Pillai's case and either affirming or overruling the view of law taken therein leaving the operative part untouched so as to remain binding on parties thereto. 20. Inasmuch as in the impugned judgment, the Full Bench has not adjudicated upon the issues for decision before it, we do not deem it proper to enter into the merits of the controversy for the first time in exercise of the jurisdiction of this Court under Article 136 of the Constitution. We must have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the High Court since the revision was dismissed on the ground of rejection of the application filed for condonation of delay and not on merits. The observation are as follows :- "20. It is clear that the Board vide its order dated 13-6-1985 held that the respondents were not liable to surrender any land. However, it cannot be said that the aforesaid order has merged with the order of the High Court dismissing the Revision petition of the appellant State as the same was dismissed on the ground of rejection of the application for condonation of delay and not on merits. 21. In this connection, the decision of this Court in S. Kalawati vs. Durga Prasad, (1976) 1 SCC 696 may be strongly relied upon. In paragraph 7 of the said decision, this Court observed as follows: (SSC p. 699). "7. The principle behind the majority of the decisions is thus to the effect that where an appeal is dismissed on the preliminary ground that it was not competent or for non- prosecution or for any other reason the appeal is not entertained, the decision cannot be said to be a 'decision on appeal' nor of affirmance. It is only where the appeal is heard and the judgment delivered thereafter the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Nadar, as noticed above, explained in detail what part of the order of the High Court or the Tribunal would actually merge in the order of the Supreme Court. This decision of the Larger Bench of the Tribunal is also contrary to the decisions of the Supreme Court in Nadar, Technoweld and Kondottyparambanmoosa, which decisions are binding under article 141 of the constitution. The decision in S. Kumar's would, therefore, not help the Department. 38. The order passed by the Supreme Court in D. Pauls can be examined from another point of view. A perusal of the order clearly indicates that in substance the appellant had made a prayer for withdrawal of the appeal so as to pursue the matter before that Tribunal for reconsideration of the impugned order in so far as the issue with regard to invocation of the extended period of limitation was concerned. The effect of withdrawal of an appeal was examined by the Supreme Court in Rani Choudhury vs. Suraj Jit Choudhury, (1982) 2 SCC 596 and it was observed that when an appeal is disposed of as withdrawn, merits of the appeal are not adjudicated upon. 39. This view was also expressed by the Madras High Court in Shasun Drugs & Chemicals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant made the following submissions :- (i) Incentives are not taxable and in the support of this contention reliance has been placed upon a decision of this Tribunal in M/s. Rohan Motors Limited vs. Commissioner of Central Excise, Dehradun, 2020 (12) TMI 1014 - CESTAT New Delhi; (ii) Once an option under rule 6 (7) of the Service Tax Rules 1994, 1994 Rules is exercised, no further liability arises; (iii) Any activity in relation to booking of passes by air travel agents would be covered under "air travel agency" services as defined under section 65(4) of the Finance Act; and (iv) The decision in D. Pauls did not render any finding as what would be the gross value of service charged from the CRS service provider and did not even specify the sub-category of BAS under which the demand was confirmed. 43. Shri Badri Narayan learned counsel for the interveners made the following submissions :- (i) The air travel agents are not promoting or marketing the services of airlines/CRS Companies; (ii) The air travel agent is promoting its own business and not to business of the airlines. In support of this contention reliance has been placed upon the decision of the Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction of a single ticket for a particular passenger and for a particular airline, becomes an incidental activity to the main activity of subscribing and owing allegiance to a particular reservation functionally. This is promoting the business CRS software companies and, therefore, classifiable under sub-clause (ii) of the definition or BAS; and (iii) Rule 6(7) of the 1994 Rules is an option available only to an air travel agent. By the essential character test, the role of the appellant is not that of an air travel agent, but of a subscriber, who exercises his choice for a preferred software system. If the appellant is not acting as "air travel agent" under the contracts, then option of rule 6(7) of the 1994 Rules is not available for this transaction. 45. The submissions advanced by the learned Counsel for the appellant, learned Counsel appearing for the interveners and the learned Authorized Representative for the Department have been considered. 46. To appreciate the submissions advanced on behalf of the parties, it would be appropriate to reproduce a chart that has been enclosed by the interveners in their written submissions and it is as follows :- 47. A perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y air." 52. It is taxable under section 65(105)(l) of the Finance Act and it is reproduced below :- "65(105)(l) "taxable service" means any service provided or to be provided to any person by an air travel agent in relation to the booking of passage for travel by air" 53. The issues shall now be considered separately. Whether the air travel agent is promoting it own business and not the business of the airlines 54. According to the appellant/interveners, the air travel agents are rendering services to passengers by providing options relating to travel routes, accommodation, booking of tickets and so any increase in the number of bookings would automatically result in an increase in the business of the air travel agents. It is their submission that this may also incidentally result in the increase in the business of the airlines, but it cannot be treated as promotion and marketing services. 55. For an activity to be considered as promotional, it is necessary that a service provider must "promote" or "endorse" the service of the client. It has, therefore, to be seen whether in the present case the travel agent is encouraging a passenger to purchase a ticket of a particular air ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as if the air travel agents get a fixed commission or income from the airlines irrespective of the passages booked by them in favour of the customers in the nature of a "retainer fee" or "guarantee money", at least that is not the case pleaded before us. Therefore, unless the air travel agents book the tickets and thereby unless they provide the services to the customers, they do not become entitled to any commission. Their commission is entirely depended on and connected with the passage they book for the customers. It cannot, therefore, be said that the commission that the air travel agents get from the airlines is independent of and distinct from the services that they provide to the air-travellers and are relatable to the business that they provide to the airlines. On the other hand, since there is no guarantee money given or no fixed commission given, which has no nexus with the bookings that an air travel agent achieves for the airlines, it has to be said that the air travel agent's commission is integrally connected with the booking that he makes and is the process the services that he gives to the customers. Once this hurdle is cleared, the very basis of the argument on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, which was brought under service tax net with effect from 10-9-2004. The respondent can be assessed for the service charges under the category, travel agency service. However according to the appellant, the respondent is engaged in business auxiliary service falling under Section 65(105)(zzb) of the Finance Act, 1994 with effect from 1-7-2005 and so much so, demand of tax under this head is tenable. We are unable to uphold the appellant's contention, because, admittedly, the respondent is engaged in booking tickets and making arrangements for travel of passengers under agreement with a well-known travel agency, M/s. Akbar Travels. For services rendered, respondent is paid commission, mainly by Akbar Travels. The Tribunal on facts, found that the service rendered by the respondent is essentially travel agency service as agents of the main travel agency, M/s. Akbar Travels. In the eye of the Tribunal, the respondent assessee is engaged in travel agency business. We do not think that the respondent could be assessed under business auxiliary service. Counsel for the respondent also submitted that the respondent has taken the is- sues for payment of tax for the travel agency servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, be said that the travel agent is engaged in the promotion of a particular CRS system. 62. In this connection reliance has been placed by the learned counsel for the appellant/interveners upon a Circular dated April 16, 2010 issued by Central Board of Excise and Customs relating to service tax on re-insurance commission. The relevant portion of the Circular is reproduced below :- "In terms of Section 101A (Part IV-A) of the Insurance Act, 1938, every insurer dealing in insurance business is required to re-insure a specified percentage of sum assured with another insurance Company. 2. The insurance Company pays premium to the reinsuring Company for this service. However, a part of such premium is deducted and kept by the insurance Company for meeting the administrative expenditure. In other words, the insurance Company and the re-insurance Company jointly bear the expenses for running the insurance/reinsurance business. This shared expense is commonly known as 'commission' though strictly it is not in the nature of a commission. It may be pertinent to mention that the customer/beneficiary deals only with the insurance Company and may not even be aware of the role of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the booking of air ticket per se, because the consideration received in the form of commission is not dependent on booking of ticket but dependent upon particular functionality of a particular CRS Company which has been used to book the ticket. Thus, the service cannot fall under "air travel agent" service but would be an activity of promotion of the services provided by CRD Company. The contention, therefore, of the learned Authorized Representative is that an air travel agent has an option to choose amongst the various CRS Companies and the exercise of such choice is the occurrence of the event of promotion. 65. Mere selection of software or exercising of a choice would not result in any promotional activity. The Department has not pointed out at any 'activity' undertaken by an air travel agent that promotes the business of the CRS Company. 66. The Department has also contended that in the present case, the demand under BAS is justified as three parties are identifiable, namely, the CRS Company, travel agent and a passenger. 67. The passenger cannot be deemed to be an audience for promotion of the business of CRS Companies, for the passenger can neither book directly through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r must promote or market the service of a client. As noticed above, it is not a case where the air travel agent is promoting the service of airlines/CRS Companies. The air travel agent is, by sale of airlines ticket, ensuring the promotion of its own business even though this may lead to incidental promotion of the business of the airlines/CRS Companies. Thus, in terms of the provision of section 65A (2)(a) of the Finance Act, the classification of the service would fall under "air travel agent" services and not BAS. Whether Incentives paid for achieving targets are taxable? 72. The contention advanced by learned counsel of the interveners is that incentives cannot be construed as "consideration" and if it is so, no service tax can be levied on this amount because under section 67 of the Finance Act, service tax is leviable on "consideration", which is the gross amount charged by the service provider for rendering a particular taxable service. 73. It would, therefore, be appropriate to examine the scope of the term "incentives". Incentives are generally given to encourage performance of a party. The factual position described above, reveals that incentives have been paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g such taxable service cannot be a part of that valuation as the amount is not calculated for providing "such taxable service." This, according to the Supreme Court, is the plain meaning attached to section 67, either prior to its amendment on 1 May, 2006 or after this amendment. 77. Consideration, which is taxable under section 67 of the Finance Act, should be transaction specific. Incentives, on the other hand, are based on general performance of the service provider and are not to related to any particular transaction of service. It needs to be noted that commission, on the other hand, is dependent on each booking and not on the target. If the air travel agent does not achieve the pre-determined target, incentives will not be paid to the travel agents. 78. In this connection it will be appropriate to take note of the decision of the Federal Court of Australia AP Group. The Federal Court of Australia held that in order to levy tax, the payment must be attributable to a particular supply and not to supplies in general and so the target incentives paid by a motor vehicle manufacturer to a dealer would not qualify as consideration as the incentives would be in relation to all supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to encourage the overall relationship to operate efficiently as involving supplies for consideration equally unpersuasive. A dealer will always wish to sell as many cars as practicable and to move old stock to make way for new stock. So too a dealer will always wish its ordering arrangements to be the most efficient and economically beneficial to it. The manufacture will have the same objectives. It is this context which underpins the Tribunal's conclusion that the payments are not for the supply of anything by the dealer. As the Tribunal said at [86] the dealer (which must be inferred to act in an economically rational manner in the ordinary course) will always want to run the business in this way. The fact that the dealer receives a payment as an incentive when certain thresholds associated with running the business in this way does not mean that the dealer is supplying a service to the manufacturer for consideration. If the incentive payment were not available there is no basis to infer that the dealer would not behave in the same way for free. For these reasons there cannot be said to be any supply for consideration in these arrangements." (emphasis supplied) 79. Reference ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the category of "Air Travel Agent's Services" and they have been issuing air tickets of various airlines and paying Service Tax on the amount of basic fare. For the purpose, the assessee-appellants used Computer Reservation System (CRS) of M/s Galileo India, Amadeus India and Calleo Distribution to encourage their business, for which they have been paying the incentives against the segment booked by the assessee-appellants during the disputed period from 01st October, 2003 to 31st December, 2008. The lower authorities has observed that the services provided by the assessee-appellants fall under the category of "Tour Operator's Services" as defined under Section 65(11)(o) of the Act. Being aggrieved, the assessee-appellants have filed the present appeal. 3. xxxxxxxxxx 4. xxxxxxxxxx 5. After hearing the rival submissions and on perusal of record, it appears that the assessee-appellants are travel agent and providing the tickets for air as well as railways. They also act as the "Rail Travel Agent's Service" which is covered under Section 65(87) of the Finance Act, 1994 and liable to pay the Service Tax. Regarding the commission/incentive received from GDS/CRS, it may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S Companies cannot be treated as deemed commission since it was merely an incentive and did not attract service tax. 83. These contentions as to whether the air travel agent is promoting the business of the airlines or the CRS Companies have been dealt with in the earlier portion of this order. The order also discusses whether the classification of service would fall under "air travel agents" services or under "BAS" and whether incentives paid for achieving the targets are taxable. 84. The inevitable conclusion, therefore, that follows from the above discussion is as follows :- (i) the air travel agent is promoting its own business and is not promoting the business of the airlines; (ii) the air travel agent is not promoting the business of the CRS Companies; (iii) in any view of the matter, the classification of the service would fall under "air travel agent" service and not "BAS" in terms of the provisions of section 65A of the Finance Act; and (iv) the incentives paid for achieving the targets are not leviable to service tax. 85. In this view of the matter, it would not been necessary to decide that once the IATA agent has discharged his service tax liability in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X
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