‘Ancillary Services’ provided to Tour Operators, covered under ‘Support Service’, 18% GST applicable: AAR [Read Order]

The Rajasthan Authority for Advance Ruling (AAR) on an application made by M/s Crown Tours and Travels while addressing the issue ruled that the services provided to the tour operators are covered within the ambit of ‘Support Service’ and as a result 18% Goods and Service Tax (GST) is applicable.

In the present application, the applicant is engaged in the business of providing the tour operators with the ‘Ancillary services’ such as Elephant Ride, guide charges, assistance charges, home host dinner, lunch/dinner at local restaurants, boat ride, camel ride, and saree turban tying, etc. Moreover, ancillary services do not include planning, scheduling, arranging tours, organizing tours by any mode of transportation.

Wherefore, in this case, the applicant has sought the advanced ruling on two issues namely:

1. Whether the ancillary services provided by the applicant to the tour operator falls within the ambit of ‘support services’ or ‘supply of tour operator services’?
2. Secondly at what will be the rate of Goods and Service Tax (GST) will be applicable to the ancillary services provided by the applicant?

The Rajasthan Authority for Advance Ruling (AAR) comprising of J.P. Meena, Member of Central Tax and Hemant Jain, Member of State Tax while addressing the issues raised by the applicant passed the advance ruling based on the rationale that the applicant is not a tour operator as it did not charge any charges for the accommodation and transportation services, therefore, the services provided by the applicant does not fall within the ambit of ‘supply of tour operator services’.

The AAR after taking into consideration the work of the applicant and observed that the services provided to the tour operators are covered within the ambit of ‘Support Services’ and as a result 18% Goods and Service Tax (GST) wherein 9% CGST and 9% SGST is applicable.