The Larger Bench of CESTAT in a recent landmark decision in the case of Kafila Hospitality & Travels Pvt. Ltd., has held that the target incentives / Performance Linked Bonus (PLB) Commission received by air travel agents from the airlines and commission received from CRS companies is not subject to service tax under the category of ‘Business Auxiliary Services’.
The Larger Bench also held that incentives received by an assessee would not qualify as consideration towards a service as these incentives would be in relation to all supplies of an assessee, and not in relation to a particular supply. It was held that a direct correlation should be established between incentives and the activity undertaken.
Lakshmikumaran & Sridharan (L&S), is pleased to organize a webinar to discuss the far-reaching implications of this order of the CESTAT Larger Bench.
The webinar will broadly cover:
- Analysis of the LB Order on various incentive arrangements under GST and Service Tax regime.
- Implications of Section 67 on various incentives received by Air Travel Agents.
- Service Tax implications on other charges when assessee has opted for Rule 6(7) of Service Tax Rules, 1994.
- Implications on volume discount and bulk discount transactions.
- Implications of this decision on the ongoing and future litigations.
- The way forward.
- L. Badri Narayanan, Executive Partner
- Vinay Jain, Joint Partner
- Jay Chheda, Principal Associate