Wednesday, February 15, 2017

Service Tax on tour operators has been doubled

There was confusion whether tour and hotel aggregators pay service tax on commission charged or entire amount paid by customers 
  • CBEC amends service tax rules to clarify the tax will be on entire amount, if customer directly pays to these aggregators
  • If customer pays only commission to aggregators and other charges to hotel, tax liability on aggregators will be on commission only
  • Currently, customer pays entire amount to aggregators because they give discounts
  • International players out of service tax net 
  • Service tax is payable at 6-15%, depending on the kind of services provided by aggregators
  • Rules effective from January 22. Aggregators have started charging more to accommodate for service tax

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