Clarification on issue of GST on Airport levies.

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.... uniformity in the implementation of the provisions of law across the field formations, in exercise of its powers conferred by section 168 of the Rajasthan Goods and Services Tax Act, 2017 (hereinafter referred to as "RGST Act"), following clarifications are issued in the succeeding paragraphs. 2. Passenger Service Fee (PSF) is charged under rule 88 of Aircraft Rules, 1937 according to which the airport licensee may collect PSF from embarking passengers at such rates as specified by the Central Government. According to the rule the airport license shall utilize the said fee for infrastructure and facilitation of the passengers. User Development Fee (UDF) is levied under rule 89 of the Aircraft rules 1937 which provides that the licensee ....

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....herwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person. Thus, PSF and UDF charged by airport operators are consideration for providing services to passengers. 2.5 Thus, services provided by an airport operator to passengers against consideration in the form of UDF and PSF are liable to GST. UDF was also liable to service tax. It is also clear from notification of Director General of Civil Aviation AIC SI. No. 5 /2010 dated 13.09.2010, which states that UDF approved by MoCA, Gol is inclusive of service tax. It is also seen from the Air India website that the UDF is inclusive of service tax. Further in order No. AIC S. Nos. 3/2018 and 4/2018....

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....e in addition to the services he supplies on his own account. "Pure agent" has been defined to mean a person who- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. 2.8 Accordingly, the airline acting as pure agent of the pass....