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of <h1>Tribunal rules in favor of airline, excludes Passenger Service Fee & Airport Taxes from service tax.</h1> <h3>M/s Turkmenistan Airlines Versus CST, Delhi</h3> The Tribunal set aside the service tax demand on Passenger Service Fee (PSF) and Airport Taxes, ruling in favor of the appellant airline. It was held that ... Valuation - includibility - Passenger Service Fee (PSF) and Airport Taxes - Held that: - Passenger Service Fee (PFS) and Airport Tax are not includable in the assessable value of the services provided by them - reliance placed in the case of Turkish Airlines [2018 (4) TMI 1144 - CESTAT NEW DELHI] - appeal allowed - decided in favor of appellant. Issues:Service tax demand on Passenger Service Fee (PSF) and Airport Taxes.Analysis:The appeal was filed against the Order-in-Original passed by the Commissioner, Service Tax, New Delhi, demanding service tax on Passenger Service Fee (PSF) and Airport Taxes. The appellant, engaged in operating airlines, challenged the demand, arguing that PSF and Airport Taxes should not be included in the gross value of taxable service provided. The Tribunal referred to a previous case involving Turkish Airlines where it was held that PSF and Airport Taxes should not be considered part of the taxable service. The Tribunal cited Rule 6 of the Service Tax (Determination of Value) Rules, 2006, stating that taxes levied by the government on air passengers, if shown separately on the ticket, should not be included in the taxable value. The Tribunal noted that the PSF and Airport Tax were collected and shown separately on the tickets, complying with the rules. Additionally, an exemption notification excluded statutory taxes charged by the government on air passengers from the taxable value for the purpose of levy of tax. Therefore, the Tribunal concluded that PSF and Airport Tax are not includable in the assessable value of services provided, leading to the setting aside of the impugned order and allowing the appeal.In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, following the established legal position that PSF and Airport Tax should not be included in the assessable value of services provided by airlines. The decision was based on the interpretation of relevant rules and notifications, ensuring compliance with tax regulations governing the aviation industry.
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