India’s Supreme Court has turned down an appeal from the Airports Authority of India (AAI), upholding a service tax on handling export cargo at airports. The decision means AAI must pay the tax for these services dating back to September 10, 2004.
The case stemmed from AAI’s challenge to a ruling by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). AAI filed the appeal under Section 35L of the Central Excise Act, 1944, arguing that export cargo handling fell outside the taxable “cargo handling service” category defined in Section 65(23) of the Finance Act, 1994.
But a bench led by Justice Pankaj Mithal, alongside Justice Prasanna B. Varale, disagreed. They pointed out that under the broader “airport services” category in sub-clause (zzm) of Section 65(105), all services provided by AAI or others at airports or civil enclaves are taxable. This includes export cargo handling, even if it’s not covered under the specific cargo handling exemption.
“The key here is that while export cargo handling is excluded from one narrow definition, it still counts as a taxable airport service overall,” the bench explained in their judgment. They also brushed aside AAI’s references to government circulars, saying those can’t override clear laws like Section 66 of the Act, which makes airport services subject to tax.
In the end, the court found no errors in CESTAT’s decision and dismissed the appeal for lacking merit. This ruling clarifies tax rules for airport operations in India and could impact how AAI and similar bodies handle fees for cargo services.
Stay informed on all the latest news, real-time breaking news updates, and follow all the important headlines in world News on Latest NewsX. Follow us on social media Facebook, Twitter(X), Gettr and subscribe our Youtube Channel.
