The applicant is engaged in the business of providing tour services to the tourists identified by the Main Tour Operator. In a transaction which the Applicant intends to undertake, the Applicant is going to provide local transportation services along with services like elephant ride, lunch/dinner, local sightseeing, guide services etc.
As a practice in the industry, there is a contractual understanding between the tourist and the main tour operator to provide a complete packaged tour. In turn the main tour operator engages sub- tour operators such as the applicant to provide local transportation services along with one or more of the services like providing guide services, sightseeing, and elephant rides. The said services together constitute an essential part of the packaged tour.
The Applicant raises a single invoice wherein all the services are shown as separate line items for accounting purposes. However, the final amount charged by the Applicant from the Main Tour Operator is the total amount of all the services together provided by the Applicant to the Tourist.
The applicant sought the advance ruling on the issue whether the rate of 5% under heading 9985(i) is applicable on transaction which the Applicant intents to undertake wherein a single invoice is raised in respect of all the services i.e. local transportation services along with services like sightseeing, tour guide, elephant ride etc., provided by the Applicant to The Main Tour Operator.
The Authority consisting of members, J.P. Meena and Hemant Jain ruled that a bill issued by a tour operator for supply of its services should be inclusive of charges of accommodation and transportation required for such a tour. The conjunction clearly explains that accommodation and transportation, both are must elements for a tour whereas conjunction ‘or’ may have rendered the option between accommodation and transportation.
However, the applicant is rendering only transportation with some ancillary services and not accommodation as such does not satisfy the conditions as mentioned under Serial No. 23 Chapter heading 9985 of Notification No. 11/2017 Central Tax (rate) dated June 28, 2017 (as amended), therefore, rate of GST 5% is not applicable.Subscribe Taxscan AdFree to view the Judgment