Service Tax Liability under Airport Services: Supreme Court to Hear Airports Authority of India Appeal Next Week

A two judge bench comprising of Justice Pankaj Mithal and Justice Prasanna B. Varale, directed to list the case next week. Further held that additional documents, if any, may be filed in the meantime.

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The assessee appellants, Airports Authority of India are engaged in managing various airports in India. They were registered with the Department for payment of service tax under various categories. The dispute in the present case relates to the period from 01/10/2003 to 31/03/2007. The service tax liability was sought to be confirmed on the appellant under the category of “storage and warehousing service” upto 09/09/2004 and under “airport services” w.e.f. 10/09/2004.

The appellants contended before the tribunal that the services now sought to be categorized under these tax entries were actually “cargo handling services” and as they relate to export cargo they are excluded from tax liability. The Original Authority adjudicated the case and confirmed service tax liability of Rs. 8,59,06,238/-. Penalties were also imposed under Section 77 and 78 of the Act.

The CESTAT held that the appellants are correctly liable to tax under this tax entry. The tribunal upheld the liability of the appellant for service tax under airport services.

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