The Central Board of Excise and Customs has extended an existing benefit of 60 per cent abatement from gross value (for computing the service tax liability) to the past period from April 1, 2000 to February 4, 2004. This benefit would be available to tour operators who were operating under a contract carriage permit issued by an appropriate transport authority for transport of passengers from one place to another (other than services provided in relation to packaged tours).

An official release said that representations were received from transport operators/bus owners that they had been asked to pay service tax on 100 per cent of the gross amount charged by them with effect from April 1, 2000, whereas service tax should be charged only on the commission earned. Abatement of 60 per cent from gross value has been available since July 9, 2004 and not prior to that date, the release added.