'All services rendered by Airport Authority of India taxable': SC upholds service Tax Demand
The Supreme Court has said all kinds of services rendered by the Airports Authority of India (AAI) in any airport are taxable and liable to service tax as it dismissed the appeal of the airport regulator against the service tax liability between 2003 and 2007.
A bench of Justices Pankaj Mithal and P B Varale upheld the March 1, 2017 order of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that approved the service tax demand from the AAI on services, including export cargo, it provides.
The AAI in discharge of its duties, handles cargo on airports including export cargo which involves a number of activities like unloading, carting, X-ray, export packing, etc. These services are rendered from the time the cargo is accepted for shipment till it is placed on the aircraft.
The AAI contended that the service tax demand was raised for services, including handling of export cargo which was excluded under Sub section (23) of Section 65 of the Finance Act, 1994.
The bench after analysing the provisions of the law said the definition of the taxable service is very wide and takes into its fold any kind of service that may be provided to any person by the Airports Authority at any airport.
"Accordingly, all kinds of services rendered by the Airports Authority in any airport are taxable services and are chargeable to service tax under Section 66 of the Act," the bench held in a recent verdict. "It may be pertinent to note that sub-clause (zzm) was introduced with effect from September 10, 2004.
Accordingly, any kind of services whether in respect of export cargo provided by the Airports Authority to any person after inclusion of sub clause (zzm) would be taxable service," the top court said.
The bench observed that the intent of the charging Section 66 of the Act, which provides for tax on the services, refers to in sub-clauses including sub-clause (zzm).
