The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) allowed benefit of abatement notification and noted that Make My Trip is facilitator between hotel and customer for short-term accommodation service.
During the relevant period, the appellant discharged the service tax liability on the entire amount received from the customers ( which is inclusive of taxes ) under the category of „tour operator services‟ by availing the benefit of abatement of 90 percent under notification dated 01.03.2006 ( till 30.06.2012 ) and under notification dated 20.06.2012 ( w.e.f. 01.07.2012 ).
An investigation was carried out by the Directorate General of Central Excise Intelligence at the premises of the appellant and it was noticed that the appellant had wrongly claimed that it was rendering tour operator services to customers as it was providing short-term hotel accommodation services and was not discharging service tax liability under this category.
The counsel for the appellant submitted that the appellant is not providing short term accommodation services. For any service to qualify as short term accommodation, it should be specifically provided by a hotel, inn, or a guest house. Neither the show cause notice nor the impugned order allege or hold that the appellant is in hotel or inn or a guest house business. In any view of the matter, even if what is alleged by the Department is correct, then too the same would not constitute service and no service tax on the same would be payable
The contention of the department is that the appellant is providing short-term accommodation service and not tour operator service and, therefore, the demand under section 73 of the Finance Act has been confirmed under this head.
A Two-Member Bench comprising Justice Dilip Gupta, President and Hemambika R Priya, Judicial Member observed that “. It is the hotel that has provided the service of short-term accommodation to the customers, and the appellant has merely acted as a facilitator between the hotel and the customer for the provision of short-term accommodation service by the hotels to the customers. The appellant is thus not a hotel. The appellant cannot, therefore, be said to be the provider of short-term accommodation service to the customers.”
“It is, therefore, clear that the taxes collected by the appellant from customer has been paid to the hotel and the appellant has also discharged has service tax liability by paying service tax on the amount collected by from the customer after availing the benefit of the Abatement Notifications as a tour operator. The appellant had not collected any amount, which was not required to be collected, from any person, in any manner as representing service tax. Section 73A of the Finance Act would, therefore, not be attracted” the Tribunal concluded.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
