2017 (3) TMI 935

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....embarking in India for international journey in a class other than economy class by Air Service". The dispute in the present case relates to correct valuation of such taxable service during the period May, 2006 to September, 2007. The issue relates to service tax liability of the appellant with reference to airport taxes, passenger service fee (PSF) and fuel and insurance surcharge collected by the appellant from the passengers, in addition to base fare. The Revenue contended that for service tax purpose, the value should be the gross amount collected by the appellant from the passengers. The appellant contested the inclusion of airport services and PSF in the value for taxation. The Original Authority on adjudication of the case confirmed ....

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.... PSF and Airport Taxes. It is submitted that different Airlines are following different practices. The facts of each case are to be examined before calculating the correct valuation of taxable service. It is submitted that the claim of the appellant that they are collecting PSF on behalf of the Airport Authority of India has to be supported with documentary evidence like agreement, general circular, etc. Further, it should be demonstrated by the appellant that they did collect only exact amount payable to Airport Authority of India from passengers. In the absence of such supporting evidence, no general conclusion to exclude such charges can be made. In fact, it is emphasized by the ld. AR that the appellants have not produced any documentar....

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....ce fee issued by the DIAL to the appellant. We have perused one such invoice along with its connected documents. The invoice states number of flights, charges, service tax, cess and total amount. We note that the amount collected from the passengers by the appellant, apparently, includes service tax. It is not clear as to how, when acting as an agent, for Airport Authority, with reference to collection of PSF, the appellant can collect the service tax also from the passengers. There can be no concept of pure agent for collecting tax on behalf of the client. Any amount collected as service tax from any person, cannot be passed on to any other person other than Government. We have asked clarification particularly on this issue from the ld. Co....

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....resent case only when the facts are established. We also note that any claim for exclusion on the basis of acting as pure agent can be made only if all conditions for such concept are fulfilled. Similarly, it is seen that the present inclusion is not on the basis of provisions of Rule 5(1) of Service Tax (Determination of Value) Rules, 2006. The said rule mentions about expenditure or cost incurred by the service provider in the course of providing taxable service. In the present case, we are not dealing with any expenditure or cost incurred by the appellant in providing any service. Their claim is that these amounts (PSF and Airport taxes) are collected on behalf of the Airport Authority. In the absence of supporting evidence and also the ....