Passenger Service Fee and Airport Taxes are excluded from taxable air transport value when charged separately.

Passenger Service Fee and Airport Taxes are treated as statutory levies collected separately from the taxable air transport service value when they are shown separately on the ticket. The stated legal position is that these amounts do not form part of the assessable value under Rule 6(2)(v) of the Service Tax (Determination of Value) Rules, 2006. The note further relies on the fact that Airport Tax is levied under the Airport Authority of India Act, 1994 and Passenger Service Fee under the Aircraft Rules, 1937, as well as the exemption for statutory taxes charged by Government on air passengers. On that basis, service tax is not payable on those amounts.

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Issues: Whether Passenger Service Fee and Airport Taxes are includible in the assessable value of the taxable air transport service for levy of service tax.

Analysis: The appeal concerned service tax on the value of air passenger transport service. The Tribunal followed its earlier view that Passenger Service Fee and Airport Taxes are statutory levies collected separately and, where shown separately on the ticket, do not form part of the taxable value under Rule 6(2)(v) of the Service Tax (Determination of Value) Rules, 2006. It noted that Airport Tax is collected under the Airport Authority of India Act, 1994 and Passenger Service Fee is collected under the Aircraft Rules, 1937. The Tribunal also relied on the exemption notification excluding statutory taxes charged by Government on air passengers from the taxable value.

Conclusion: Passenger Service Fee and Airport Taxes are not includible in the assessable value, and the demand of service tax on such amounts cannot be sustained.

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