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TMI Blog2024 (9) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... - CESTAT MUMBAI - LB] - The decision of Larger Bench related to outbound tours to locations outside India. In the instant case, the issue relates to conducting of tours within territory India. The decision in the case of M/s. Cox Kings India Ltd. related to service provided in respect of clients who would travel outside India. Thus, the ratio of this decision is not relevant for the instant case where the destination of tours is within India. In the said decision great reliance has been placed on the provision in Export of Services Rules, 2005. The said Rules relate to the services where either the client or the location of performance or immovable property is located outside India. In the instance Case, the entire services are provided within the territory of India and therefore, the provisions of the Export of Services Rules, cannot be applied to the instant case. The claim of the appellants that in case of Pre-Planned Package Tours activities of Planning, Scheduling, Organizing and Arranging are already completed before the customer approaches the appellants. In that sense, the only an offer is prepared before the customer approaches and all activities of Planning, Scheduling, O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegories: 1. Customers of Pre-Planned Package Tour. 2. Customers of Customized Tour. 2.1 He pointed out that the present dispute relates to both these types of tours made to Jammu Kashmir (J K). He pointed out that a show cause notice was served to the appellant for the period from 2006-07 to 2010-11 and demand made in said demand was confirmed vide Order-In-Original dated 20.02.2013 and demand made in another show cause notice issued on 27.11.2012 was also confirmed on 24 January, 2014. The said demands were upheld by the Commissioner (Appeals) and consequently, these appeals have been filed. 2.2 Learned Counsel pointed out that in case of Pre-Planned Package Tours, the activity of planning, scheduling, organizer or arranging (Planning, Scheduling, Organizing And Arranging ) takes place prior to booking of tour by the customers. The appellants prepare brochure giving details of the location of visit, dates of departure of tours etc. He argued that the brochures are prepared after completion of the event of planning, scheduling and part of organizing of likely Hotels etc. He argued that at the time of planning, scheduling, etc, in such cases, there is no customers available and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sert that if the taxable service is partly performed outside India that it shall be treated as performed outside India. He further argued that Circular No. 111/05/2009-ST dated 24.02.2009 has clarified that the services falling under Rule 3(1) (ii) of the Export of Services Rules, 2005 shall treated as export of services if place of performance is partly outside India. He argued that in terms of proviso to Rule 3(ii) of the Export of Services Rules, 2005, entire service of tour operator will be considered as rendered outside India. He relied on the following decision for this purposes. B.A. RESEARCH INDIA LTD 2010 (18) S.T.R. 439 (Tri. Ahmd.) SGS INDIA PVT. LTD 2014 (34) S.T.R. 554 (Bom.) MAERSK INDIA PVT. LTD 2015 (38) S.T.R. 1121 (Bom.) 2.7 He further relied on the decision of Tribunal in the case of Creative Travels Pvt. Ltd.-2022 (10) TMI 9-CESTAT New Delhi wherein para 14 following has been observed. 14. The change in the statutory provision has added elements to the activity that makes for being tour operator both the unamended and amended version, entirety of performance in India is the criterion for subjecting the consideration to tax. That is the only conclusion that can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adventurous Sledge Car Ride at this exotic snow point. Night halt at Srinagar. Day 3 Srinagar: after breakfast enjoy Shikara Ride at Dal Lake for 2 hrs (at our cost). After lunch, sightseeing of Shankaracharya Temple, Nishat Baug 7 Shalimar Baug. Night halt at Srinagar. Day 4 Srinagar Gulmarg - Srinagar: After breakfast proceed to Gulmarg (3hrs. journey) to enjoy Gandola Cable Car Tide (at Your own cost) also enjoy photography, horse riding Shopping at this beautiful snow point. In the evening return back to Srinagar (3hrs. journey). Night halt at Srinagar. Day 5 Srinagar - Pahalgam: After breakfast proceed for Pahalgaum (4 hrs. journey), After lunch enjoy shopping natural beauty of this exotic place Night halt at Pahalgaum. Day 6 Pahalgam : After breakfast enjoy the natural beauty at Chandanwadi (at our cost), enjoy hours riding at this at beautiful place (at your own cost). Night halt at Pahalgaum. Day 7 Pahalgam Srinagar: After breakfast transfer to Srinagar Airport to board your flight for Mumbai with Memorable experience of the tour conducted by Heena Tours Travels. 5. The legal provision related to the case are as follows: 5.1 The Section 64 of the Finance Act, 1994 reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irrespective of the distance between such places. 5.5 It is apparent that the definition of tours operator has two parts:- Tours Operator means (i) Any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, (ii) and includes any person engaged in the business of operating tours in a tourist vehicle or a contract carriage by whatever name called, covered by a permit, other than a stage carriage permit, granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made there under . Both these are individually taxable services as held in the case of M/s. Cox Kings India Ltd CESTAT Mumbai Interim Order No. 104/2023 dated 19.10.2023 as extracted in para 7.3 below. In the first category the taxable activities are merely Planning, Scheduling, Organizing and Arranging . The activities of Planning, Scheduling, Organizing and Arranging involved booking of transport, hotels, and meals and/or organizing tour guides. The tour operator organises hotels, meals, tour guides or transport in Jammu and Kashmir. These are in the nature of input ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he service provider being from the State or otherwise. The content of this Trade Notice may be brought to the notice of all concerned. The above circular applies only to cases where the services are provided in the state of Jammu and Kashmir. 7.1 In the instant case, it is clear that the services are provided outside state the of Jammu and Kashmir. In the Order-In-Original, the following has been recorded as the manners of providing services. The assessee is engaged in the business of conducting and operating the package tour in the state of J K. The various steps which are required to be carried out for conducting the tour are as follows:- a) Determining the probable dates and venues of the tour. b) Finalizing the itinerary of the tour. c) Booking of the Accommodation in Hotels in the State of J K d) Planning and booking for Traveling through bus on tour. e) Other On - Tour services. f) Meals on Tour. g) Service of Tour Leader accompanying Tour. 7.2 It is apparent that the appellant is doing the Planning, Scheduling, Organizing And Arranging of jobs listed in a g above within the India from its own office. The booking of hotel for accommodation is an input service for the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport. 36. It is, therefore, not possible to hold that what is contained in the inclusive clause of the definition is necessarily not contained in the first part of the definition as was held by the division bench in the earlier decision in Cox King. Thus, the service consists only of Planning, Scheduling, Organizing And Arranging tours. 7.4 The situation can be explained more elaborately with following examples:- i) If a person uses services of a tailor and uses said tailoring services for stitching of suit in Delhi. Thereafter, if he takes and uses the suit only in Jammu and Kashmir does it mean that the service of tailor has been used in Jammu and Kashmir. The service of tailor is entirely provided in Delhi and it does not matter where the suite is worn therefore. ii) Similarly it a coaching institute located in Delhi provides training to a client and he uses the said training for admission to university in Jammu and Kashmir, then it cannot be held that service of training is provided or consumed in Jammu and Kashm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third Member as under :- In view of the above discussion, the points of difference, mentioned in para 60 are answered as under :- (i) The term export has not been defined either in Article 280(1)(b) or in any of the article of the Constitution of India. Though the Apex Court s judgments in the case of the State of Kerala v. The Cochin Coal Company Ltd. [(1961) 2 STC 1 SC] and Burmah Shell Oil Storage Distribution Co. of India v. Commercial Tax Officer Others reported in (1960) 11 STC 764 (SC) explain the meaning of the term export , the ratio of these judgments which are with regard to export of goods, is not applicable for determining what constitutes the export of services. There is no question of Export of Services Rules, 2005, being in conflict with Article 286(1)(b) of the Constitution of India. (ii) The principle of equivalence between the taxation of goods and taxation of service had been laid down by the Apex Court in the case of Association of Leasing Financial Service Companies v. Union of India (supra) and All India Federation of Tax Practitioners v. Union of India (supra) in the context of constitutional validity of levy of Service Tax on certain services. This princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same has to be treated as export of service. It is the person who requested for the service and is liable to make payment for the same who has to be treated as recipient of the service, not the person or persons affected by the performance of the service. Thus, when the person on whose instructions the services in question had been provided by the agents/sub-agents in India and who is liable to make payment for these services, is located abroad, the destination of the services in question has to be treated abroad. The destination has to be decided on the basis of the place of consumption, not the place of performance of service, in the case of this service. (vi) Reimbursement of advertisement and sales promotion activities received from WU is not taxable as the same are for the services provided to WU, which are export of service. (vii) The question of time-bar is not relevant when the main question has been answered in favour of the agents sub-agents. (viii) (ix) These questions are no longer relevant when the main question has been answered in favour of the agents and sub-agents. (x) When the services provided by the sub-agents have been held to be export of service and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... territory of India and all their transactions happen with taxable territory of India. 8.3 The hotels are the service providers to the appellant. Similarly the tourist guides or vehicle owners who take the tourist around in J K might be located in Jammu Kashmir are service providers to appellant and not to tourist who are clients of appellant. The service provided by these guides, vehicle owners or hotels, to the appellant could possibly be outside the purview of service tax. In the instant case there is a contract between the hotels and the appellant, and not between the tourist clients of appellant and hotels. Therefore, the hotels are provider of service to the appellant and not to the tourist clients. The services of planning, organizing etc and by the appellant to clients are provided within the taxable territory of India (outside Jammu Kashmir) 8.4 It is seen that in the case of SGS India Pvt. Ltd the contract of the domestic, service provider was with overseas client, although in respect of goods located in India. In the instant case, the contract of appellant located in taxable terribly is with his clients located in taxable territory. The service provider to the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant that activities are made Planning, Scheduling, Organizing and Arranging happens prior to the Customer approaching very doubtful. It is seen that the activity of Planning, Scheduling, Organizing and Arranging involves booking of train and airlines which cannot be done without the names of the clients. The said activity also involves booking of rooms which cannot be done without ascertaining the number of clients. The activity of organizing vehicles can also not been done without determination of number of clients. The offer made in Pre-Planned Package Tours is only in the nature of an offer to Plan and organize tours. it cannot be the situation that irrespective identify of any clients, the appellants book airline tickets, book hotels, book vehicles, book tour guides. Thus, it can be seen that the claim of the appellants that in case of Pre-Planned Package Tours activities of Planning, Scheduling, Organizing and Arranging are already completed before the customer approaches the appellants. In that sense, the only an offer is prepared before the customer approaches and all activities of Planning, Scheduling, Organizing and Arranging happen after the approach of customer. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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