Appellant engaged in providing service of booking of air tickets, arrangement for food, local travel, etc. at places outside India — Appellant paid service tax under the category of ‘Air Travel Services’ but Department demanded tax for providing ‘Tour Operator Service’ — Held, out-bound tours outside the purview of service tax — Predeposits of the dues were waived.

Appellant engaged in providing service of booking of air tickets, arrangement for food, local travel, etc. at places outside India — Appellant paid service tax under the category of ‘Air Travel Services’ but Department demanded tax for providing ‘Tour Operator Service’ — Held, out-bound tours outside the purview of service tax — Pre-deposits of the dues were waived.

The appellant was engaged in arranging tours/ tour packages within India and out of India. The appellant undertook activities like booking of air tickets, arrangements for hotel stay at places outside India, food, local travel at places outside India, etc. and they also undertook work related to Visa formalities. The appellant paid service tax under the category ‘Air Travel Services’ in respect of tickets booked from a place in India to the first place outside India and air travel from last destination in foreign country to the first destination in India. The Department was of the view that the amount collected from tourists like air fare and expenses for other arrangements was to be included under the category of ‘Tour Operator Service’ for which the Department raised service tax demand along with interest and penalty.

Held:

The planning and arrangements undertaken are primarily relating to out-bound tours and the same involve coordination with agencies outside India. According to the Board’s Circular F. No. B. 43/10/97- TRU, activities of out-bound tours are outside the purview of service tax. Hence the pre-deposits of the dues were waived.