SC Ruling On User Development Fee Provides Guidance For GST,
SC Ruling On User Development Fee Provides Guidance For GST, Tax On Royalty
|
The SC had held that UDF collected by the DIAL is in the nature of statutory levy and the same would not be taken as consideration against any services.
A recent judgment by the Supreme Court (SC) on the user development fee (UDF) collected by the Delhi International Airport Limited (DIAL) may have ramifications on the goods and services tax (GST) as well as the income tax on royalty etc.
Last week, the apex court had held that UDF collected by the DIAL is in the nature of statutory levy and the same would not be taken as consideration against any services.
As such, no service tax is payable on UDF, the court ruled.
As such, no service tax is payable on UDF, the court ruled.
In determining that the fee collected by the DIAL is in the nature of statutory levy, the court had laid down some principles.
Firstly, UDF is collected for the development of future establishment at the airport and no additional benefit is accrued to passengers, visitors, traders, and airlines upon levy of this fee. Thus, the UDF is in the form of ‘tax or cess’, collected for financing the cost of future projects and the same cannot be taken as consideration for services provided to the customer, visitors, passengers, vendors etc.
Secondly, the collection is not premised on the rendering of any service.
Thirdly, the amounts collected are deposited in an escrow account, not within the control of the assessee.
Fourthly, the utilization of funds is monitored and regulated by law.
Though the ruling related to the pre-GST matter, experts said the principles laid down by the SC should be applied to the GST too.
“The impact of principles laid down in the judgment would need to be analyzed under the GST legislation which specifically provides that statutory levies other than GST collected by the supplier would form part of the value of supply,” said Saurabh Agarwal, tax partner at EY.
Besides, the principles may be used for determining whether the tax be paid on royalty etc, he said.
“These may be useful in determining whether the consideration in the form of fee, royalty, etc collected by the government from business entities would be in the nature of the statutory levy or the same would be considered as a consideration against any services,” he said.
Source..
Source..
Post Categories
Featured Posts
Latest Posts
Latest Posts
EVMs Non-Tamperable, Demand For 100% VVPAT Verification Regressive: Election Commission Tells Supreme Court
Ahead of the 2024 Lok Sabha elections, the Election Commission of India (ECI) has staunchly defended electronic voting machines (EVM) as ‘non-tamperable’, both owing to technological measures and strict administrative and security procedures designed by the commission. In a recent ...
Repatriation of Funds: Guidelines for NRIs
Navigating the repatriation of funds as a Non-Resident Indian (NRI) can be complex, but understanding the guidelines can simplify the process and ensure compliance with Indian regulations. Here's a comprehensive overview to help NRIs manage their finances effectively. 1️⃣ ...
Freezing of Bank Accounts by ED/GST/Police – Legal Remedies Explained
Has your bank account suddenly been frozen by the Enforcement Directorate, GST authorities, or police investigation? For businesses and individuals alike, a frozen bank account can bring operations to an immediate halt. Why Bank Accounts Are Frozen by Authorities Authorities ...
𝐋𝐞𝐠𝐚𝐥 𝐄𝐭𝐡𝐢𝐜𝐬 & 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐢𝐬𝐦: 𝐁𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐓𝐫𝐮𝐬𝐭 𝐢𝐧 𝐭𝐡𝐞 𝐋𝐞𝐠𝐚𝐥 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲
🔹 𝑰𝒏𝒕𝒆𝒈𝒓𝒊𝒕𝒚. 𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒂𝒃𝒊𝒍𝒊𝒕𝒚. 𝑪𝒐𝒏𝒇𝒊𝒅𝒆𝒏𝒕𝒊𝒂𝒍𝒊𝒕𝒚. These pillars define a true legal professional. But in today’s fast-paced legal landscape, how do we maintain them? ✔ 𝑼𝒑𝒉𝒐𝒍𝒅𝒊𝒏𝒈 𝑪𝒍𝒊𝒆𝒏𝒕 𝑪𝒐𝒏𝒇𝒊𝒅𝒆𝒏𝒕𝒊𝒂𝒍𝒊𝒕𝒚: A lawyer’s duty is to protect sensitive information—breaching it damages trust. ✔ 𝑨𝒗𝒐𝒊𝒅𝒊𝒏𝒈 ...
DBS Bank Directors Can’t Be Prosecuted For Acts Of Lakshmi Vilas Bank Before Amalgamation : Supreme Court Quashes Criminal Case
The Supreme Court today ruled that DBS Bank and its directors, who were appointed after the amalgamation with Lakshmi Vilas Bank(LVB) and had their appointments approved by the Reserve Bank of India (RBI), cannot be held criminally liable for actions ...
NEET-PG : Supreme Court Dismisses Plea Challenging Reduction Of NEET-PG 2023 Qualifying Percentile To Zero
The Supreme Court on Monday (September 25) dismissed a petition challenging the decision of the Union Government to reduce the cut-off for post-graduate medical college admissions through NEET-PG 2023 exam as zero percentile. A bench comprising dismissed a PIL filed ...
Speak With Our
Get a Appointment