Foreign airlines not liable to deduct TDS on navigation charges: SC

New Delhi: In a breather to foreign airlines, the Supreme Court has held that charges paid for cargo service, rout navigational facility (RNLC) and termination navigational landing (TNLC) and hotel stay to Airport Authority of India (AAI) do not amount to ‘rent’ and, therefore, no tax was to be deducted at source (TDS).
Dismissing the Income Tax Department’s plea against Gulf Air Company, a Bench headed by Chief Justice SH Kapadia has upheld the Delhi High Court’s judgment that held that payments for such services cannot be termed as ‘rent.’ The high court had held that TDS on hotel accommodation would be deducted only if taken on regular basis.
It further ruled that airlines didn’t have any written arrangement with hotels and the oral arrangements with hotels was not for stay of their crew members but for passengers who were to be accommodated till the availability of next flight.
03/09/10 Indu Bhan/Financial Express

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Categories: airports Sep 2010, Foreign Sep 2010