The Customs, Excises, and Service Taxes Appellate Tribunal (CESTAT), New Delhi Bench held that Jet Airways and Spice Jet are entitled to exemption from payment of Integrated Goods and Service Tax (IGST) on re-import of repaired parts or aircraft into India.
The Appellant, Jet Airways (India) Ltd. and Spice Jet Limited are a scheduled airline operator, engaged in the business of transportation of passengers and goods by air. In order to carry out the scheduled operations in India, the Appellant imported aircrafts and it is stated that when the engines or auxiliary power units or other parts of the aircrafts began to develop defects, they were exported out of India for repairs.
At times, the aircraft also have to be exported out of India for repairs and maintenance. The repaired parts/ aircrafts are thereafter re-imported into India and at the time of re-import, Bills of Entry are filed. These Bills of Entry are assessed to basic customs duty and integrated tax at the applicable rates.
The dispute in all the appeals is as to whether the Appellant is justified in claiming exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/ aircrafts into India during the period commencing August 2017 to March 2019.
The Commissioner disallowed the integrated tax exemption claimed by the Appellant on all the Bills of Entry and integrated tax was levied on the fair cost of repairs and the cost of insurance and freight charges, both ways.
The coram headed by President Justice Dilip Gupta while giving the relief to the Jet Airways and Spice Jet set aside the order passed by the Commissioner and held that the Appellant is entitled to exemption from payment of integrated tax under the Exemption Notification on re-import of repaired parts/aircraft into India.
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