Service Tax abatement – tour operators
Government has issued Notification No.15/2007-Service Tax dated 04.04.07 under section 11C of the Central Excise Act, exempting levy of service tax, for the period from 01.04.2000 to 04.02.04, on 60% of the gross amount charged for taxable services provided by tour operators, operating under a contract carriage permit issued by the appropriate transport authority, for transport of passengers from one place to another (other than services provided in relation to package tours).
Representations were received from transport operators / bus owners operating regular point to point transport of passengers between different cities or towns under contract carriage permit issued by the appropriate transport authority that they had been asked to pay service tax on 100% of the gross amount charged by them with effect from 01.04.2000, whereas service tax should be charged only on the commission earned. Notification No.2/2004- ST dated 05.02.04 was issued prescribing abatement of 90% from gross value in respect of taxable service other than packaged tours. Abatement of 60% from gross value has been available since 09.07.04 vide notification No.8/2004-Service Tax dated 09.07.04.
The Government has decided to extend the benefit of abatement of 60% from gross value in respect of the above mentioned taxable services to the past period also i.e. from 01.04.2000 to 04.02.04.
But where is the notification? Getting the notification printed and published in the Gazette is not as easy as manufacturing a notification in the North Block. Government usually finds the Mayapuri press too busy to print its notifications. In any case nobody ever sees the Gazette. Sometime back a High Court judge asked me to produce a copy of the gazette for a notification. I submitted to his Lordship that it is impossible! Government is so much tied up in the bureaucratic red tape that it is not able to make its own notifications public. But why can’t they enclose a copy of the notification when they give press releases? Simple, by that time the notification is not printed and so legally not valid! It’s all back dated administration!
We came to know about this notification through the PIB!