CHANGE IN SERVICE TAX RATE ON TOUR OPERATORS w.e.f. 22-01-2017
The Central Government vide Notification No. 04/2017 has amended the Rate of Abatement under Service Tax on TOUR OPERATORS w.e.f. 22-01-2017 with details as below:-
(1) Any booking solely for the purpose of accommodation by a tour operator has been removed from the category of Tour Operator which was previously taxed after 90% abatement – It is suggested that in such cases a tour operator should charge his commission separately from the customer and Service Tax to be charged only on the Commission earned by the tour operator and Service Tax at the Full Rate of 15%.
(2) A tour, other than 1 above : Rate of Service Tax changed to 9% [NEW RATE] from earlier 4.5% [OLD RATE] (Abatement reduced from 70% to 40%).