NCLAT: Can’t Dismiss Restoration App. if Filed in 30 Days from Date of Dismissal of Original App.  ||  Delhi HC: Communication between Parties through Whatsapp Constitute Valid Agreement  ||  Delhi HC Seeks Response from Govt. Over Penalties on Petrol Pumps Supplying Fuel to Old Vehicles  ||  Centre Notifies "Unified Waqf Management, Empowerment, Efficiency and Development Rules, 2025"  ||  Del. HC: Can’t Reject TM Owner’s Claim Merely because Defendant Could have Sought Removal of Mark  ||  Bombay HC: Cannot Treat Sole Director of OPC, Parallelly with Separate Legal Entity  ||  Delhi HC: Can Apply 'Family of Marks' Concept to Injunct Specific Marks  ||  HP HC: Can’t Set Aside Ex-Parte Decree for Mere Irregularity  ||  Cal. HC: Order by HC Bench Not Conferred With Determination by Roster is Void  ||  Calcutta HC: Purchase Order Including Arbitration Agreement to Prevail Over Tax Invoice Lacking it    

Central GST, Delhi vs. Delhi International Airport Ltd - (Supreme Court) (19 May 2023)

User development fee is a statutory levy and not subjected to levy of service tax

MANU/SC/0610/2023

Goods and Services Tax

In present appeals, orders of the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) are impugned by the service tax authorities (“the revenue”), who argue that, user development fee levied and collected by the airport operation, maintenance and development entities (i.e., the Mumbai International Airport Pvt. Ltd., the Delhi International Airport Pvt. Ltd., and the Hyderabad International Airport Pvt. Ltd., (“the assessees”) is subjected to service tax levy, under the provisions of the Finance Act, 1994.

In the present case, neither is there any compulsion to levy development fee nor is the collection conditional upon its deposit in the government treasury. However, the absence of these features in present Court’s opinion, does not render UDF any less a statutory levy. Firstly, the ruling in Consumer Online Foundation v. Union of India (UOI) and Ors. is conclusive that UDF is a statutory levy. Secondly, the collection is not premised on rendering of any service. Thirdly, the amounts collected are deposited in an escrow account, not within the control of the assesses. Fourthly, the utilization of funds, is monitored and regulated by law.

The fact that the amount is not deposited in a government treasury, per se, does not make it any less a statutory levy or compulsory exaction. Nor does its discretionary nature render it any less a statutory levy. Airport management has evolved; it is no longer the monopoly of the government; private participation is recognized. This sector is now regulated through a new regulator, i.e., the Airports Economic Regulatory Authority of India.

As part of the Union’s economic policies, the upgradation and renovation of airports are funded through UDF, which is a statutory levy. Instead of the conventional practise of ensuring that amounts collected are deposited with the Government, an entirely new regulatory regime has been envisioned, under the Airports Authority Of India (major Airports) Development Fees Rules, 2011 (2011 Rules), read with specific conditions imposed by the AAI on each assessee, which includes monitoring of amounts, nature of expenditure, submission of plans for expansion, renovation, their sanctioning etc. These rules and controls are in the public interest, and evidently intended to further efficiency in funding and swift taking up and completion of works, rather than funding through Finance Rules, which might entail delay, and cost overruns. However, the public nature of these funds does not in any manner get undermined, merely because they are kept in an escrow account, and their utilization is monitored separately. The impugned orders cannot be faulted. Appeals dismissed.

Tags : UDF   COLLECTION   STATUTORY LEVY  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved