Make-MyTrip, Yatra, Cleartrip may not be treated as intermediaries soon as service tax issue rakes up

Travel companies such as Make-MyTrip, Yatra, Cleartrip and Expedia are facing service tax issues time and again.

The tax department wants them to pay service taxes under the hotel service providers category, however, these firms claim that they just intermediaries.

The tax department wants the online travel portals to pay service tax on the commission it keeps while passing a book to the respective hotel.
This has become a challenge as a service tax can hurt the online travel agency sector.

Bipin Sapra, a partner who specialises in taxation at consultancy EY, told ET that the hotel booking industry works on the basis of commissions and therefore they should be treated as intermediaries unless facts prove otherwise.

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