Supreme Court Upholds Service Tax on Airports Authority of India: A Legal Verdict

The Supreme Court has ruled that all services rendered by the Airports Authority of India (AAI) across airports are subject to service tax, ending a long-standing legal dispute. The decision came as the court dismissed an appeal by AAI challenging its service tax liability for the period between 2003 and 2007.

A bench comprising Justices Pankaj Mithal and P B Varale upheld the 2017 judgment of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), which had affirmed the demand for service tax on AAI's diverse airport services, including the handling of export cargo. This ruling emphasizes that the scope of taxable services under the law is comprehensive and inclusive.

The AAI had argued that handling export cargo was exempt from service tax under specific legal provisions. However, the bench highlighted that with the introduction of sub-clause (zzm) in 2004, services offered by AAI in handling export cargo became expressly taxable. The ruling confirms that services listed under Section 66, including those related to airport operations, attract service tax.

(With inputs from agencies.)