Passenger service fee and airport taxes excluded from air transport service tax base to avoid double taxation.

Passenger service fee collected by an airline was treated as a statutory levy linked to airport services under the Airports Authority of India Act, and its inclusion in the airline's taxable value was rejected because service tax had already been paid by the airport authority, avoiding double taxation. Airport taxes were also held to be charges outside the consideration for air passenger transport and therefore not includible in the taxable value. The result was that neither passenger service fee nor airport taxes formed part of the airline's service tax base.

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Issues: Whether passenger service fee and airport taxes collected by the airline were includible in the taxable value for service tax under air passenger transport service.

Analysis: The Tribunal followed its earlier decisions on identical facts and held that passenger service fee is a statutory levy relatable to airport services under Section 22 of the Airports Authority of India Act, 1994. It further noted that service tax on such fee had already been remitted by the airport authority, and inclusion of the same amount again in the airline's taxable value would lead to double taxation. The Tribunal also treated the airport taxes as charges not forming part of the consideration for transport of passengers by air.

Conclusion: Passenger service fee and airport taxes were not includible in the taxable value of the assessee's air transport service.

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