Air Travel Booking Services Not Taxable Under BAS | CESTAT

Case Details: Trinity Air Travel & Tours Pvt. Ltd. Versus Commissioner of CGST & Central Excise, Mumbai East (2025) 32 Centax 245 (Tri.-Bom)

Judiciary and Counsel Details

• S/Shri S.K. Mohanty, Member (J) & M.M. Parthiban, Member (T)
• Shri J.C. Patel, Adv., for the Appellant.
• Shri A.K. Shrivastava, Authorised Representative, for the Respondent.

Facts of the Case

The appellants, functioning as air travel agents, provided services pertaining to the booking of air tickets by utilising the portals of CRS (Computerised Reservation System) service providers. Customers approached the appellants for ticket bookings without any knowledge of the specific CRS involved, and the appellants did not act as agents of the CRS or as representatives for customers to facilitate purchase of tickets from CRS providers. The appellants received commissions, incentives, and cancellation charges related to such bookings, in addition to their standard remuneration. The jurisdictional tax authorities sought to classify such receipts under the taxable category of ‘Business Auxiliary Services’ (BAS) as defined in Section 65(19) read with Section 65(105)(zzb) of the Finance Act, 1994. The appellants contended that their services fell exclusively under the scope of ‘Air Travel Agent’ services as defined under Section 65(4) read with Section 65(105)(l) of the Finance Act, 1994, and that they had duly discharged service tax liability under the composition scheme prescribed under Rule 6(7) of the Service Tax Rules, 1994. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi.

CESTAT Held

The CESTAT held that the services provided by the appellants in relation to booking of passage for air travel were not covered under BAS. It was observed that there was no connection between the CRS, the appellants, and the customers, and the appellants were not promoting any activity for the passenger or providing any service on behalf of the CRS. The definition of ‘air travel agent’ included all services connected with, or in relation to, booking of passage for travel by air. The services rendered were for booking of airline tickets and, in some cases, for achieving pre-determined targets. The fact that the appellants received incentives or commission from airlines or CRS companies did not alter the nature of the services rendered. Accordingly, the commission, incentives, cancellation charges, etc., could not be subjected to levy of service tax under BAS. Since the appellants had paid service tax under Rule 6(7) of the Service Tax Rules, 1994, and such classification had been accepted by the Department, it was held that a contrary stand could not be taken to impose liability under a different category.

List of Cases Cited

• Akbar Travels India Pvt. Ltd. v. Commissioner — 2018 (14) G.S.T.L. 248 (Tribunal) — Referred [Para 2.1]
• Akbar Travels of India Pvt. Ltd. v. Commissioner — 2019 (22) G.S.T.L. 427 (Tribunal) — Referred [Para 2.1]
• BCD Travels India Pvt. Ltd. v. Commissioner— 2023 (385) E.L.T. 526 (Tri. – Chennai) = (2023) 7 Centax 143 (Tri. – Mad.) — Referred [Para 2.1]
• Bhagwati Spherocast Pvt. Ltd. v. Commissioner — 2019 (368) E.L.T. 308 (Guj.) — Referred [Para 2.9]
• British Airways PIC India Branch v. Commissioner — 2018 (10) G.S.T.L. 561 (Tribunal) — Referred [Para 2.3]
• Commissioner v. Shabeer Travels — 2011 (24) S.T.R. 171 (Ker.) — Referred [Para 2.1]
• Commissionier v. Om Air Travels Pvt. Ltd. — 2019 (25) G.S.T.L. 460 (Tribunal) — Relied on [Paras 2.5, 12]
• ECE Industries Ltd. v. Commissioner — 2004 (164) E.L.T. 236 (S.C.) — Referred [Para 2.9]
• Globe Forex & Travels Ltd. v. Commissioner — 2015 (37) S.T.R. 513 (Tribunal) — Relied on [Paras 2.3, 2.4, 10]
• K.K. Appachan v. Commissioner — 2007 (7) S.T.R. 230 (Tribunal) — Referred [Para 2.8]
• Kafila Hospitality and Travels Pvt. Ltd. v. Commissioner — 2021 (47) G.S.T.L. 140 (Tri. – Lb.) — Relied on [Paras 2.1, 2.2, 8]
• Lanxess Abs Ltd. v. Commissioner — 2011 (22) S.T.R. 587 (Tribunal) — Referred [Para 2.8]
• Modiline Travel Services Pvt. Ltd. v. Commissioner — 2023 (12) TMI-911-CESTAT New Delhi — Referred [Paras 2.1, 2.4]
• Nizam Sugar Factory v. Collector — 2006 (197) E.L.T. 465 (S.C.) — Referred [Para 2.9]
• Nizam Sugar Factory v. Collector — 2008 (9) S.T.R. 314 (S.C.) — Relied on [Para 17]
• Religare Securities Ltd. v. Commissioner — 2014 (36) S.T.R. 937 (Tribunal) — Referred [Para 2.8]
• Steelcast Ltd. v. Commissioner — 2009 (14) S.T.R. 129 (Tribunal) — Referred [Para 2.8]

List of Departmental Clarification Cited

• C.B.E. & C. Circular No. 137/6/2011-S.T., dated 20-4-2011 [Para 9]

List of Notifications Cited

• Notification No. 25/2012-S.T., dated 20-6-2012 [Paras 9, 10]