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.
|