2024-VIL-631-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Classification of service - Short-term accommodation service or tour operator service - entitlement to abatement of 90% on gross amount charged under notification dated 20.06.2012 – Demand by simultaneously invoking of section 73 and section 73A of the Finance Act, 1944 - invoking of section 73A of the Finance Act, 1944 in respect of cases where the customers stay in hotels having tariff value of less than Rs. 1000 per day or cases where the hotels are located in the State of Jammu & Kashmir – Extended period of Limitation - HELD – In a decided matter the notice issued to the appellant alleged that since appellant was purchasing rooms from hotels, which were rented out to its customers, it would be rendering short term accommodation service as defined under section 65(105)(zzzzw) of the Finance Act for the period prior to 01.07.2012 and renting of hotel accommodation service under section 66E(a) of the Finance Act for the period thereafter; that appellant could not qualify as a tour operator and had availed benefit of abatement of tax incorrectly under the relevant notifications; and that appellant had recovered an amount as service tax which was not paid to the Government and, therefore, such amount was liable to be recovered under section 73A of the Finance Act - The factual position and the issues in the aforesaid decision of the Tribunal in appellant’s own and the present appeals are identical - The Tribunal, in aforesaid decision held (i) That renting of hotel accommodation service can only be provided by a hotel. Appellant, did not qualify as a hotel and could, therefore, not render the service of renting of rooms in a hotel; (ii) That Appellant merely acted as a facilitator between the customer and the hotel permitting the booking of hotel rooms. For this, Appellant received commission; (iii) That Appellant qualified as a tour operator and, therefore, on the service of booking of accommodation of service, Appellant was entitled for the benefit of abatement; and (iv) That the taxes collected by Appellant were paid to the hotels for further remittance. Hence, section 73A of the Finance Act could not be invoked - in view of the decision of the Tribunal, the impugned order is set aside and the appeals are allowed
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