2024 (1) TMI 524 - AT - Service Tax

Levy of service tax - PSF and Airport Taxes - Admin fee - Whether collection of Admin fee is in the nature of pre-ponement, postponement or cancellation charges, or not? - HELD THAT - This is a fact to be verified by the Commissioner and if no Admin fee is collected by the appellant at all, the question of levying service tax on it does not arise. The impugned order set aside insofar as the demand of service tax on PSF and Airport Taxes is concerned. The appeal is partly allowed setting aside the demand of service tax on PSF and Airport Taxes. However, the matter is remanded to the Commissioner for verification whether the appellant had collected any admin charges during the relevant period and if so, the taxability.

Summary

Issues involved: The issues involved in the judgment are the demand of service tax on Passenger Service Fee (PSF), Admin fee, and Airport Taxes by the Commissioner of Service Tax, New Delhi.

PSF and Airport Taxes:
The appellant, an airline company, was alleged to have not paid service tax on PSF, Admin fee, and Airport Taxes collected from passengers. The appellant contended that no service tax is leviable on PSF and Airport Taxes. The Tribunal referred to past decisions and ruled that service tax cannot be levied on PSF and Airport Taxes, citing Rule 6 of the Service Tax (Determination of Value) Rules, 2006. The Tribunal found that the appellant had complied with the conditions of Rule 6 and set aside the demand for service tax on PSF and Airport Taxes.

Admin Fee:
Regarding the Admin fee, the authorized representative relied on a precedent case where it was held that service tax is leviable on pre-ponement and postponement charges collected by the airline. However, the Tribunal noted that the appellant disputed collecting any Admin fee and stated that the Commissioner should verify this fact. The Tribunal set aside the demand for service tax on PSF and Airport Taxes, remanding the matter to the Commissioner to examine if the appellant had indeed collected any Admin fee and if service tax can be levied on it.

Conclusion:
The Tribunal held that the order-in-original demanding service tax on PSF and Airport Taxes lacked merit and set it aside. The appeal was allowed with consequential relief. The matter of Admin fee was remanded for further examination by the Commissioner to determine the taxability based on the appellant's actual collection practices.