CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,(CESTAT) (Entitlement of Abatement Notification)
Court- CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,(CESTAT)
Key Issue- Operational / Abatement Notifications
Subject- Entitlement of Abatement Notification -Make My Trip(Facilitator)
Adjudicated by- Hon’ble Sri Justice Dilip Gupta (President) and Hon’ble Ms
Hemambika R. Priya (Member (Technical) (Service Tax Appeal No 51844 of
2021)
M/s Make My Trip (India) Private Limited-Appellant
Additional Director General, Directorate General of GST IntelligenceRespondent
AND
SERVICE TAX APPEAL NO 51845 OF 2021
AND
SERVICE TAX APPEAL NO 51846 OF 2021
( Arising out of the order-in Original No-09-11/2021-ST dated 29/07/2021
passed by Additional Director General(Adjudication),Directorate General of
Goods & Services Tax Intelligence(Adjudication cell) New Delhi)
Acts Involve;
1) BENEFIT OF 90% UNDER ABATEMENT NOTIFICATION DATED
01.03.2006(TILL 30.06.2012) AND UNDER NOTIFICATION DATED
20.06.2012(W.E.F.01.07.2012)
Facts of the matter;
➢ Service Tax Appeal No-51844 of 2021 has been filed by M/s Make My
Trip(India) Private Limited to assail the order dated 29.07.2021
passed by the Additional Director General confirming a portion of the
demand proposed in the show cause notice dated 17.10.2016 and the
two statement of Demand dated 22.10.2018 and 12.04.2019 issued
u/s 73 and 73A of the Finance Act 1994 with interest and Penalty.
➢ Service Tax Appeal No 51845 of 2021 and Service Tax Appeal No
51846 of 2021 have been filed by the Vice President (Finance) and
Group CFO and the Director of the appellant to assail that part of the
order dated 29.07.2021 that imposes penalties upon them.
➢ The Appellant , which is an Indian online travel company , owns an
online platform named “makemytrip.com” which allows the
customer to book hotel rooms ,flight bookings, train bookings and bus
tickets through its website application .It registered itself with the
Service Tax Department for provision of air travel agents services and
tour operator services.
➢ The Appellant stated that for each booking ,three documents are
issued by the appellant, which are as follows;
(i) Service Tax invoice is issued by the appellant at the time of
check-in on booking of hotel rooms done by the customer.
The appellant discharges its service tax liability on the basis
of this invoice;
(ii) Hotel Confirmation Voucher is issued to the customer
when the booking is confirmed by the hotel. The voucher
contains details like check -in and check out dates, number of
guest, base amount, discount, hotel taxed, amount paid,
other packages and cancellation policy, and
(iii) Hotelier’s Voucher is issued to the hotel. The voucher
contains details of the customer, check-in and check out
dates, room type, number of guests, base amount, discount ,
hotel taxes and other packages.
➢ Appellant enters into three types of Agreements with hotel and
provides interest free deposit to the hotel, allotment of specific
number of rooms and its commission accordingly.
➢ During the relevant period , the appellant discharged the service tax
liability on the entire amount received from the customer (which in
inclusive of taxes)under the category of “tour operator service’ by
availing the benefit of abatement of 90% under notification date
01.03.2006(till 30.06.2012) and under notification dated
20.06.2012(w.e.f. 01.07.2012)
➢ On investigation at premise, it was noticed that the appellant had
wrongly claimed that it was rendering tour operator services to
customers as it was providing short terms hotel accommodation and
was not discharging service tax liability under this categories. Show
Cause notice issued along with demand note against Appellant.
➢ The main issues involved in the appeals are;
(i) Whether the appellant provided ‘short term accommodation”
service made taxable u/s 65(105) (zzzzw) of the Finance Act ,
or “tour operator” service made taxable u/s65(105)(n) of the
Finance Act;
(ii) Whether the appellant was entitled, as a tour operator, to
abatement of 90% on the gross amount charged under the
Abatement Notification in respect of service of a tour
operator; and
(iii) Whether the department is justified in invoking section 73A
of the Finance Act in requiring the appellant to pay the alleged
taxes collected from the customers and passed on to the
hotels for their payment of tax under hotel accommodation
services.
➢ For all the above issues framed were determined through micro
analysis i.e. “Privilege Partnership Agreement” executed in between
hotel and appellant, nature of services, its terms , liabilities and
indemnification of hotel towards customers etc . Finding of Court; “it
is therefore, evident from the aforesaid that by providing booking of
hotel rooms services to the hotel/customers through the online
portal, the appellant merely acted as a facilitator between the hotel
and customers. It is therefore, clear that for any service to qualify as
“short-term accommodation “ service, the service should be provided
specifically by hotel.
➢ It is clear that any person who is engaged in the business of planning,
scheduling, organizing, arranging tours, including accommodation,
would be a tour operator. The appellant is engaged in business of
arranging tours, including accommodation through online portal. It
would, therefore, qualify to be a tour operator.
▪ Final Judgement
In view of the aforesaid discussion, the confirmation of the demands
proposed in the show cause notice and the two statement of
demands cannot be sustained.
The impugned order dated 29.07.2021 passed by the adjudicating
authority is, therefore, set aside. Service Tax Appeal no -51844 of
2021, Service Tax Appeal no-51845 of 2021 and Service Tax Appeal No
51846 are, accordingly, allowed.
Order pronounced on 10.01.2024,
thanks…..
DISCLAIMER:
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being issued without any knowledge of intent, prejudice, non-disclosure,
misrepresentation, or concealment of facts if any.
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represents our understanding of the provisions of the law on the matter. The
compliance mentioned above is not exhaustive and other compliance may also be
involved depending on case to case basis.
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