After MakeMyTrip, service tax probe extended to Goibibo, Yatra

In a major development, the DGCEI, which is the investigation wing of CBEC, has widened the ambit of service tax probe to Goibibo and Yatra as well after MakeMyTrip. Investigation officers in DGCEI say travel portals MakeMyTrip and Goibibo have been collecting service tax on renting hotel rooms to customers directly, but the companies never deposited the amount in government coffers. Both these portals have also been claiming service tax abatements as tour operators, despite the fact that no such tours were organized. According to the DGCEI officers, its a grave and serious offence to collect taxes but not deposit the amount in govt accounts. Investigation officers also say Yatra has not collected service tax from customers directly for renting of hotel rooms, but the company has also not paid service tax on this account, to the govt so far. Investigation officers have not quantified the service tax liability of Yatra yet but will treat amounts collected by the company as inclusive of service tax. The company has voluntarily paid Rs 2.5 crore after receiving service tax summons. While DGCEI officers have quantified Goibibo's service tax liability at Rs 35 crore out of which the company has voluntarily deposited Rs 5 crore. All the three companies are being probed for non payment of service tax since 2011. When CNBC-TV18 reached out for a commment from Goibibo, the company issued a statement which says ''We are an online travel platform that enables hotels and other service providers to list on our platforms and on the other hand travellers to make bookings and reservations on these service providers. We are just an intermediary. As a good corporate citizen we comply with all laws and regulations in the country". In the meanwhile, the interim bail application filed for a MakeMyTrip executive who was recently arrested is coming up for hearing on February 11, where Rs 42 crore will have to be coughed up for the bail to be granted. So far MakeMyTrip has deposited Rs 25 crore out of an outstanding liability of Rs 67 crore.