What comes as a major relief to Mumbai International Airport (MIAL), the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has granted it a relief in the battle against the service tax department, reports CNBC-TV18's Ashmit Kumar. The Service Tax department had, in 2011, sought to levy a 10 percent service tax on the Development Fee collected by the airport developer. The primary contention of the department was that the fee is collected for rendering services to passengers, and hence service tax could be levied on the collections. Consequently, the department had raised a demand of Rs 55 crore against MIAL.
CESTAT, in its order, however, differed from the stand taken by the department. The CESTAT held that fee helped promoters raise funds for upgradation and expansion, in compliance with the Airports Authority of India Act. CESTAT also held that the Fee was in the nature of a “cess” and that service tax could not be levied over such as fee.
08/10/13 CNBC-TV18/moneycontrol.com
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CESTAT, in its order, however, differed from the stand taken by the department. The CESTAT held that fee helped promoters raise funds for upgradation and expansion, in compliance with the Airports Authority of India Act. CESTAT also held that the Fee was in the nature of a “cess” and that service tax could not be levied over such as fee.
08/10/13 CNBC-TV18/moneycontrol.com
