Due date of Uploading ST-3 for half year ended on 31.03.2017 extended to 30.04.2017

CBEC has extended the due date for filing of Service Tax return for the half year 2 of Financial year 2016-17 i.e half year ended on 31.03.2017 from 25.04.17 to 30.04.17 due to non- availability of easy or smooth website of ACES for uploading ST-3

Service tax applicability and amendments on Tour and Travel operators - Release II

Applicability of Service Tax on Tour & Travel Operator

Who is a “Tour Operator” under the Service Tax Laws?

Tour operator means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.

What is the value of taxable service provided by a tour operator?

The value of taxable service provided by a tour operator to a client is the gross amount charged by such operator from the client for services in relation to a tour and includes the charges for any accommodation, food or any other facilities provided in relation to such tour.

I. Amendment in services of a tour operator:

Prior to 12 January 2017, tour operators, tours Operators have an option to discharge his Service tax liability as follows:

Particulars of Service	Abatement Rate	Taxable Portion	Conditions
Service of solely booking accommodation for tourist	90%	10%	1. No CENVAT credit on inputs  has been claimed 2. Bill should indicate the service charges as well as accommodation charges.
Package tour Services(planning &  arranging tours)	70%	30%
Services Other Than above two mentioned above.	70%	30%

However, w.e.f. 12 Jan. 2017, Ministry of Finance vide Notification No.4/2017-ST, tour operator services shall be allowed an abatement of 40% & Service Tax shall be payable on the balance 60%. Details are as follows:

Particulars of  Services	Abatement Rate	Taxable Portion	Conditions:
Tour Operator Services	40%	60%	1. No CENVAT Credit on input services have been availed. 2.   The invoice issued for must indicate that it is inclusive of accommodation charges as well as transportation charges required for such tour.

Who is an Air Travel Agent? Are his services chargeable to Service Tax?

An “Air Travel Agent” is any person engaged in providing any service connected with the booking of passage for travel by air.

Any service provided or to be provided to any person, by an air travel agent in relation to booking of passage for travel by air is a taxable service.

Difference between Tour Operator & Air Travel Agent.

Tour operator plans & arranges the tour but travel agent only books the tickets & gets commission & brokerage for selling those tickets. The words plans & arranges are important & differentiates between Tour operator & Travel Agent.

II. Air Travel Agents:

(A) Change in Rate of Tax under compounding scheme for Air Travel Agent.

Earlier the Air travel Agents were liable to discharge their ST liability as follows:

S. No.	Description of Services	Prior to Amendment	Amended vide as per Notification No. 5/2015-ST Dated March 1, 2015.
1	Domestic Bookings	0.6% of Domestic Booking + SBC & KKC	0.7% of Domestic Booking + SBC & KKC
2	International Bookings	1.2% of International Booking + SBC & KKC	1.4% of International Bookings+ SBC & KKC

     (B)    Abatement system applicable to Air Travel Agents.

Prior to 1st April 2016, air travel agents were liable to discharge their Service Tax liability as follows:

Description of services	Abatement Allowed	Taxable Value	Condition for Abatement
Transportation of passenger by Air, with or without accompanied belongings	40%	60%	1.No CENVAT Credit has not been availed

However, as per Notification No. 8/2015-ST dated 1st April 2015; classification of services as well as rate of abatement has been amended.

Description of services	Abatement Allowed	Taxable Value	Conditions for Abatement
Transportation of passenger by Air, with or without accompanied belongings: (i) Economy Class (ii) Other Than Economy Class			No CENVAT Credit of services used for providing taxable service has been has been availed.
	40%	60%
	60%	40%

Summarized & Amended Provisions of Service Tax relating to Tour Operators & Air Travel Agents.

The abovementioned amendments and notifications can be summarized as follows:

S. No.	Taxable Service	Abatement % Age	Taxable Value	Conditions	Statutory Reference
I. Tour Operators
a.	Services by a Tour Operator	40%	60%	1. No CENVAT Credit for input services & Capital goods have been claimed. 2. The bill issued for this purpose indicates that it is inclusive of all charges of accomodation as well as transportation charges required for such tour.	S. No. 1 of Notification No. 4/2017-Service Tax dated 12th January 2017.
II. Air Travel Agents
a.	Compounding Scheme	Option to pay service tax at flat rate* on ‘basic fare’ @ 0.7 % in case of domestic booking and 1.4% in case of international booking – plus SBC	NA	1. No restriction on availability of CENVAT Credit. ** Option, once exercised, will apply uniformly in respect of all the bookings of passage for travel by air made during the financial year.	* Notification No. 5/2015 dated 1st March 2015 (applicable)   Union Budget 2016. (applicable from 1st April 2016) Rule 6(7) of Service Tax Rules amended b y Notification No. 5/2015-ST  dated 1March,2015
b.	Normal Abatement Method	(i) Economy Class: 60% (ii)Other Than  Economy Class: 40%	40% 60%	1. No CENVAT Credit has been availed claimed.	S. No. 11(iii) Notification No. 8/2015 dated 1st March 2015
c.	Transportation of passenger with or without accompanied belongings by air embarking or terminating in a regional connectivity scheme airport	(iii) Transportation of passengers by Air embarking or terminating in a regional connectivity scheme airport.	10%	1. No CENVAT Credit has been availed claimed.	S. No.1 (a) Notification No. 38/2016-ST dated 30th Aug. 2016

** Option to claim CENVAT Credit: There is no explicit clarification as to whether an air travel agent providing air travel services can claim CENVAT Credit of input services availed for providing such services.

In our Opinion, it is upto Air Travel agent to decide whether to claim CENVAT Credit on input services or not, since, law is silent on this point.

Contributed by : Tanveer Alam ( CA Finalist) at Sandeep Ahuja & Co

Service Tax payments and returns due dates & penalties for delay

Service Tax Returns are to be filed half yearly so two returns in one year but the payments are made on the basis of category of service provider either monthly or quarterly.

Ø  Quarterly Payments: Individual service providers, Proprietorship service providers, Partnership firm service providers i.e other than corporate where corporate signifies only Private limited or Limited Companies only are liable to pay Quarterly and due date of payment of service tax is 6^th day of the month following the month of quarter ends except for March where the due date is 31^st March of every year for Quarter ended on 31^st March of every year.

Ø  6th of July.

Ø  6th of October.

Ø  6th of January.

Ø  31st of March.

Monthly Payments:

The following types of service taxpayers ie Corporate Service Tax Assessees need to pay their service taxes every month:

Ø  Private Limited / Limited Company

Ø  Limited Liability Partnership (LLP).

Ø  One Person Company

Penalty for Late Payment of Service Taxes

If the service tax due from the taxpayer is delayed then interest is chargeable on such dues

Delay in Payments	Service Provider having Annual Taxable Services above 60 Lacs	Service Provider having Annual Taxable Services above 60Lacs
Payment is delayed up to 6 months	18% Simple Interest on daily basis	18% Simple Interest on daily basis
Payment is delayed for over 6 months but less than 1 year	24% Simple Interest on daily basis	24% Simple Interest on daily basis
Payment is delayed for over 1 year	30% Simple Interest on daily basis	27% Simple Interest on daily basis

Filing Service Tax Return Due Date and Penalties

All the Service Tax Assessees i.e Service Providers or Service recipients or chargeable to tax under Reverse Charge and having a Service Tax Registration Number are required by law to file their Service Tax Returns on a Half Yearly basis even if No Tax is Due.

Services tax payments are to be deposited in Govt accounts by the assessee (Service Provider) for the provision of services on a monthly or quarterly basis depending upon the nature of the assessee but the Service Tax Returns are to be filed on a half-yearly basis by all service tax assessees.

No matter how many taxable services are provided by the service provider or service tax payer need only file one Service Tax Return for every half year for the half year ended on 30^th September and Half Year ended on 31^st march of every year.

Due date of Service Tax Return filing is

25^th Oct of every year for the half year ended on 30^th September

25^th April for the Half Year ended on 31^st March.

Penalty for delay in filing of Service Tax Return by the due date

Late fees for delay up to 15 days from the due date.	Rs.500
Late fees for delay more than 15 days but less than 30days from the due date	Rs.1000
Late fees for delay more than 30 days from the due date	Rs.1000 plus Rs100/- per day after 30 days from the due date till the date of submission

Maximum penalty can be levied Rs.20000/- for any number of days where exceeds as specified above.

Service Tax Return Form:

·         The tax return form to be used for Service Tax Return is Form ST-3, or Form ST-3A.

·         The Following information is to be furnished:

Ø  The total value of taxable services  &  total Service tax charged or billed for.

Ø  The total value of taxable services realized & service Tax Realised

Ø  The total  Cenvat Credit Received and Availed

Ø  The total amount of service tax payable / paid.

·         File Service Tax Return can be mandatory to be filed Online on www.aces.gov.in

·         Service Tax Return once uploaded can be viewed in 2 business days for any error

·         Service Tax return Filed can be revised within 90 days from the date of submission of Original Return