Airport User Development Fee Under 2011 Rules Not Considered Service Payment, Says CESTAT.

Levy of Service tax - user development fee levied and collected by the airport operation, maintenance and development entities - 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 2011 Rules, read with specific conditions imposed by the AAI on each assessee - CESTAT correctly held that the charges collected by the assesses under Section 22A of the AAI Act cannot be regarded as considered for services rendered. - SC .....

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