Page 44 - GSTL_18th June 2020_Vol 37_Part 3

J78 GST LAW TIMES [ Vol. 37
Airport services — User development fee charged from
passengers by licensee for providing facilities
whether liable to Service Tax?
The Supreme Court Bench comprising Hon’ble Mr. Justice Arun Mishra,
Hon’ble Mr. Justice S. Abdul Nazeer and Hon’ble Ms. Justice Indira Banerjee on
20-5-2020 after condoning the delay issued notice in the Civil Appeal Diary No.
3135 of 2020 filed by Commissioner of Customs, Central Excise and Service Tax,
Hyderabad-II against the CESTAT Final Order No. A/30739/2019, dated 16-9-
2019 as reported in 2019 (31) G.S.T.L. J28 (Tri. - Hyd.) (GMR Hyderabad Interna-
tional Airport Ltd. v. Commissioner). While issuing the notice, the Supreme Court
passed the following order :
“Delay condoned.
Issue notice.
Mr. E.C. Agrawala, Learned Counsel, accepts notice on behalf of the
respondent.
Let additional documents, as prayed for, be filed within four weeks
from today.
List along with Civil Appeal D. No. 36251 of 2019.”
The Appellate Tribunal in its impugned order by 2:1 majority had held
that the User Development Fee (UDF) charged from the passengers by the as-
sessee who were granted an exclusive right and privilege to carry out develop-
ment, design, financing, construction, commissioning, maintenance, operation
and maintenance of Green Field International Airport constructed by them under
‘Build Own Operate Transfer (BOOT) Scheme under an agreement and also au-
thorized to collect such charges by the Ministry of Civil Aviation of the Govern-
ment of India, are not liable to Service Tax under the category of Airport services.
The Majority judgment relied upon the decision in the case of Mumbai Interna-
tional Airport P. Ltd. v. Commissioner reported in 2017 (51) S.T.R. 280 (Tri. - Mum-
bai). In the Minority judgment it was however, held that since as per agreement
the User Development Fee (UDF) collected by the assessee was meant to provide
facilities and amenities to the passengers though it was not specifically linked to
the service provided to such individual passengers, the same should be treated
as inclusive of Service Tax particularly when it was inclusive of all taxes.
REPRESENTED BY : Mr. A.N.S. Nadkarni, ASG, Mr. Maninder Singh,
Senior Advocate, Mr. B. Krishna Prasad, AOR,
Ms. Nisha Baghchi, Mr. Mahesh Aggarwal,
Mr. Sparsh Bhargava, Mr. Shubham Kulshreshtha,
Mr. Prabhas Bajaj and Mr. E.C. Agrawala,
Advocates, for the Appearing Parties.

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GST LAW TIMES  18th June 2020  44
( A78 )