2024-VIL-379-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax – Section 65(19) of Finance Act, 1994 – Sale of tickets – Earning of commission – Tax liability – Appellants are engaged in providing Air Travel Agents Services – Appellants were buying tickets from other GSA/IATA agents and sale same to clients – GSA/IATA agents passed discount or commission given by airlines to Appellants after retaining a portion of same – Revenue opined that commission retained/earned by Appellants is towards service rendered by them to co-GSA/IATA agents for business auxiliary services provided by Appellants to co-GSA/IATA agents – Adjudicating authority confirmed demand of service tax under category of Business Auxiliary Services – Whether Appellants are liable to pay service tax on commission earned by them under “Business Auxiliary Service” – HELD – Case of Revenue is that Appellants are commission agents for their co-operators and are earning commission for same and therefore, they are rendering business auxiliary service to their co-operators – On-going through explanation given under Section 65(19) of the Act, commission agent means a person who acts on behalf of another person and causes sale or purchase of goods, for a consideration and includes any person who does some of things, while acting on behalf of another person – Practice of trade, if observed closely, would indicate that Appellants are buying tickets on behalf of their customers/clients and not definitely on behalf of their co-operators – There is no principal and agent relationship between other GSA/IATA operators and Appellants – Relation between Appellant and co-operators appears to be one of principal-to-principal basis – If at all Appellants are presumed to be acting on behalf of somebody else for a commission, it is their customers/clients for whom they are buying tickets from other GSA/IATA operators – Appellants are not rendering any Business Auxiliary Service to other GSA/IATA operators and therefore, commission earned by them is not exigible to service tax as proposed in show cause notice and confirmed in impugned order – Impugned order demanding service tax under category of Business Auxiliary Service is not legally sustainable and is liable to be set aside – Appeal allowed
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