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Rule 32(3) — air travel agent — value of supply of services on supply of services in relation to booking of tickets is taken as a fixed percentage of the BASIC fare:
AAlways 18%
B10% (domestic), 18% (international)
C5% (domestic), 10% (international)
DAlways 5%
Answer & Solution
Correct answer: C. 5% (domestic), 10% (international)
1. Rule 32(3) — Air Travel Agent (ATA) can opt to take 5% of basic fare for domestic bookings and 10% of basic fare for international bookings as the value of his service.
2. 'Basic fare' = the part of fare on which the airline pays commission to ATA (excluding taxes/charges).
3. Tax is then charged at 18% on this 5/10% deemed value.
_Source: ICAI BoS CA Final Paper 8, Ch 5 "Value of Supply", §Rule 32(3)_
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