Login | Register Now | Contact Us   
 

CGST Act IGST Act UTGST Act GST (Compensation to the States) Act Addendum to the GST Rate Schedule - 03.06.2017 101st Constitution Amendment Act, 2016 Addendum to the GST Rate Schedule - 18.05.2017 GST Compensation Cess Rates Decided in the GST Council Meeting held on 18.05.2017 Chapter Wise Rate wise GST Schedule - 03.06.2017 Chapter wise GST Rate Schedule for Goods Decided in the GST Council Meeting held on 18.05.2017 Revised Threshold for Composition Scheme - 11.06.2017 IGST Exemptions Approved by the GST Council - 11.06.2017 GST Rates Approved by the GST Council - 11.06.2017 Service Tax Exemptions in GST IGST Exemption, Concession List - 03.06.2017 Composition - Rules Valuation Rules ITC - Rules Invoice, Debit & Credit Notes - Rules Payment - Rules Refund - Rules Registration - Rules Return- Rules Transition Rules Proposed CTD Document Accounts and Record Rules GST rate Schedule for Services Decisions Taken by the GST Council in the 16th Meeting - 11.06.2017 List of Services under Reverse Charge Classification Scheme for Services Under GST
Air Transport of Passengers Services [Sec 65(105)(zzzo)
Effective upto 30th June, 2012
<A-B> <C-D> <E-H> <I-M> <N-R> <S-S> <T-Z>
 
INTRODUCED: With effect from 1st May 2006

Air Transport Services was introduced on 01-05-2006, but it covered only international transport services. Domestic Air transport Services was not covered in levy of Service Tax. From 01-07-2010, definition covers domestic as well as international travel under Service Tax net.

 

Contents
Scope
Clarification
Exemption
Relevant Notifications / Circulars
Accounting Code
Service Tax 00440362
Interest  00440363
Penalty 00441445
 
DEFINITION:

According to Section 65 (105) (zzzo) to any passenger, by an aircraft operator, in relation to scheduled or non-scheduled air transport of such passenger embarking in India for domestic journey or international journey;

Prior to 01-07-2010 [Explanation 1.—For the purposes of this sub-clause, economy class in an aircraft meant for scheduled air transport of passengers means,—

(i) Where there is more than one class of travel, the class attracting the lowest standard fare; or

(ii) Where there is only one class of travel, that class.

Explanation 2.—For the purposes of this sub-clause, in an aircraft meant for non-scheduled air transport of passengers, no class of travel shall be treated as economy class;]

"Scheduled air transport service" means an air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, each flight being open to use by members of the public; [ Rule 3 : Aircraft Rules 1937 ]

According to Section 65 (77c) “passenger” means any person boarding, at any customs airport, an aircraft for performing an international journey, but does not include—

According to Section 65 (3a) “aircraft” has the meaning assigned to it in clause (1) of section 2 of the Aircraft Act, 1934 (22 of 1934); accordingly "Aircraft" means any machine which can derive support in the atmosphere from reactions of the air other than reactions of the air against the earth's surface and includes balloons whether fixed or free, airships, kites, gliders and flying machines;

According to Section 65 (56a) “international journey”, in relation to a passenger, means his journey from any customs airport on board any aircraft to a place outside India;

 
SCOPE:
TOP

Liability to pay service tax is on the aircraft operator.

Economy class passengers are excluded from the levy of service tax under this sub-clause in case of scheduled air transport. Non-Scheduled air transport services (passenger) means air transport services other than scheduled air transport services as defined in the Rule 3 of the Aircraft Rules, 1937. i.e. in case of chartering private plane, the exemption of economy class passenger will not be available.

Transit passengers not leaving the customs area will not be covered under this sub-clause. Here transit passenger means a person who has already begun his journey of international travel from a place other than India and continues his/her journey through India to a place outside India.

 
SOME CLARIFICATIONS:
TOP

ISSUE 1: An international journey commencing from an Indian airport involves stopover/ transfer at intermediate airports outside India before reaching the destination (say Mumbai-Dubai-London-New York).

Whether service tax would be liable in such case on the value indicated in the ticket for the entire journey or only on that part of the value attributable to the first sector (Mumbai-Dubai) of the journey?

ANSWER 1: Aim of the passenger is to travel from Mumbai to New York. Actual destination of the international journey is the criterion to decide the value of the service (in this case, New York). Stopover/transfer at intermediate airports, being merely incidental and part of the main journey, is of no relevance or consequence for levy of service tax under section 65(105)(zzzo) read with section 66.

Service tax in such cases is leviable on the total consideration of a single composite service relating to the entire journey. i.e., value indicated on the ticket for the entire journey.

ISSUE 2: An international journey (say Delhi-Mumbai-London) includes travel in a domestic sector (Delhi – Mumbai) as part of the international journey.

Whether service tax is liable on the value of whole journey or after excluding the value attributable to the domestic sector from the total value of the ticket ?

ANSWER 2: In this case, the journey is a single composite journey. The aim of the passenger is to travel from India to a place outside India. Part of the travel in the domestic sector cannot be segregated from the single journey. Service tax is, therefore, leviable on the total value of the ticket treating the domestic sector as integral part of the international journey without excluding the value attributable, if any, to travel in the domestic sector.

ISSUE 3: An international journey commences from an airport outside India and completed at an airport outside India but including a sector wherein the passenger disembarks and subsequently embarks at an Indian airport as part of international journey (say Sydney-Mumbai-Dubai-Singapore-Sydney).

Whether service tax is liable for Mumbai-Dubai sector only or on the total value of the ticket?

ANSWER 3: In this case, the journey being a single one and the aim of the passenger is not to travel from India to a place outside India, service tax is not leviable under section 65(105)(zzzo).

ISSUE 4: Whether ticket issued outside India for an international journey commencing from India (say Delhi–London) is liable to service tax?

ANSWER 4: Service tax is payable by the service provider, namely aircraft operator, for the taxable service provided. Place of purchase/issue of ticket is of no relevance or consequence to determine the levy of service tax under section 65(105)(zzzo) read with section 66. Service tax is leviable as long as the passenger embarks in India for an international journey, in any class other than economy class.

ISSUE 5: Whether service tax is liable on the total value of the ticket or only half the value of the ticket in the case of round trip/return ticket (say Delhi-London-Delhi)?

ANSWER 5: Service tax is leviable on the total value of the ticket.

 
SERVICE TAX EXEMPTIONS:
(a) Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/- (Service Tax Notification No. 8/2008-ST dated 01.03.2008)

(b) Services provided to the United Nations or International Organisations

(c) Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d) Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(e) Services provided by Reserve Bank of India

(f) Out of total value of service provided proportionate value of goods and material provided by the Service Provider

TOP
RELEVANT SERVICE TAX NOTIFICATIONS:
Service Tax Notification No. 04/2011-S.T., dated 01-03-2010 (effective from 01-04-2011) Amendment in Notification No. 26/2010-ST dated 22-06-2010 relating to exemption
Service Tax Notification No. 36/2010-S.T., dated 28-06-2010 (effective from 01-07-2010) Exemption for value of service received in advance by service providers prior to 01-07-2010
Service Tax Notification No. 27/2010-S.T., dated 22-06-2010 (effective from 01-07-2010) Exemption for journey originating or terminating in specified states
Service Tax Notification No. 26/2010-S.T., dated 22-06-2010 (effective from 01-07-2010) Exemption for value of Taxable Service in excess of Rs. 100/Rs. 500
Service Tax Notification No. 25/2010-S.T., dated 22-06-2010 (effective from 01-07-2010) Exemption to service to a person arriving at custom port in India for continuing international journey and employees on board the aircraft
 
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
TOP
Service Tax CBEC Instruction Letter (F. No. 334/03/2011-TRU) dated 01-07-2011
Service Tax CBEC Instruction Letter (F. No. 334/01/2010-TRU) dated 26-02-2010
Service Tax  Circular No. 96/7/2007-ST dated 23-08-2007.Clarification of taxability issues.
Service Tax CBEC Instruction Letter : F No. 334/04/2006-TRU dated 28-02-2006. Clarification of Scope.
Service Tax D. O. Letter (F. No. 334/03/2010-TRU) dated 01-07-2010
 
 
<A-B> <C-D> <E-H> <I-M> <N-R> <S-S> <T-Z>

 

 
 

www.centralexciseonline.com

 


www.taxolegal.com


Page copy protected against web site content infringement by Copyscape


www.customsindiaonline.com
Home | Mission | Contact Us | Acknowledgements © 2009 Copyrights, All Rights Reserved. 
Disclaimer Though all efforts have been made to reproduce the order and other contents correctly, the access and circulation is subject to the condition that EASY SERVICETAXONLINE DOT COM PRIVATE LIMITED is not responsible/liable for any loss or damage caused to anyone due to any mistake/error/omissions. Mr Certify site is constantly updated and any or all of the contents are liable to be modified, altered, deleted or replaced. EASY SERVICETAXONLINE DOT COM PRIVATE LIMITED is not responsible/liable for any loss or damage caused to anyone whether directly or indirectly  due to any modification , alteration, addition, deletion or replacement of any of the contents.

Copyright: Reproduction of news articles, photos, or any other content in whole or in part in any form or medium without express written permission of  EASY SERVICETAXONLINE DOT COM PRIVATE LIMITED is prohibited.Do not copy contents of this site. All pages are protected by COPYSCAPE. Plagiarism will be detected by COPYSCAPE.