CESTAT ruled in favour of TBO Tek, setting aside a INR 30.2 Cr service tax demand from the central government
The company’s shares closed at INR 1,537.75 on the BSE, gaining 0.93% following the verdict
The travel tech firm reported Q2 FY25 net profit of INR 60.1 Cr, up 7% YoY, while expanding its global footprint with new subsidiaries in Australia and Canary Islands
B2B travel portal TBO Tek, or Travel Boutique Online, has won its six-year-long tax dispute against the central government’s Service Tax Department.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in New Delhi has ruled in the company’s favour on November 11, rejecting the department’s INR 30.2 Cr tax demand.
At the core of this dispute was how TBO Tek collected service tax during 2007-2013. The tax department claimed the company had received payments from airlines that already included service tax, while simultaneously collecting service tax from its travel sub-agents – effectively collecting the same tax twice.
However, the company argued that payments from airlines never included any service tax, and it had properly deposited all taxes collected from sub-agents with the government.
In March 2019, the Additional Deputy Commissioner upheld the tax department’s view and ordered TBO Tek to pay INR 30.2 Cr with interest. The company appealed this decision at CESTAT in June 2020, depositing INR 2.65 Cr (7.5% of the total demand) as protest money.
The CESTAT ruling completely sets aside the tax department’s order, removing this liability from TBO Tek’s books.
On the back of this, the company’s shares closed at INR 1,537.75 on the BSE today, up INR 14.20 or 0.93% from its previous close.
The ruling removes a significant contingent liability from TBO Tek’s books, though the company confirmed no impact on its operations. This victory comes amid TBO Tek’s aggressive global expansion plans.
Founded in 2006, TBO Tek has been strengthening its international presence through strategic acquisitions and new subsidiaries. The company recently incorporated TBO Tek Australia to tap into the Australian tourism industry. This follows its September 2024 expansion into Europe with TBO Jumboline Canarias, a wholly owned subsidiary in the Canary Islands.
TBO Tek reported a mixed set of numbers for Q2 FY25. The company’s net profit stood at INR 60.1 Cr, up 7% from INR 56.1 Cr in the same quarter last year. However, profit declined 1.3% quarter-on-quarter from INR 60.9 Cr in Q1 FY25.
The travel tech company has made several strategic acquisitions in recent years, including Switzerland-based BookaBed AG for INR 90.4 Cr to boost its market share in Ireland and the United Kingdom. It also acquired Jumboline, the online distribution arm of Spain’s Jumbo Tours Group, for INR 219.6 Cr last December.
TBO Tek, which went public in May, provides travel solutions to agents and tour operators, including white-label services, hotel and flight booking APIs, and dynamic travel packages. The stock has performed well since its listing at INR 1,380, registering a 55% premium to its issue price. The stock trades on both BSE and NSE, having touched a 52-week high of INR 2,000 and low of INR 1,229.45.
