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
Legal Challenges in NRI Marriages...
Introduction Non-Resident Indian NRI marriages while often joyous can also bring a unique set of legal challenges These challenges stem from cross-border legal systems differing cultural expectations and complex family dynamics Understanding these issues is crucial for NRIs and their...
Judge Aspirants Get Relief Supreme Court Sets Aside BPSC's Rejection Of Candidates For Not...
The Supreme Court on Friday September granted relief to three judicial service aspirants from Bihar whose candidatures were rejected by the Bihar Public Service Commission BPSC due to non-production of original certificates at the time of interview Holding that production...
Builder Buyer Disputes in India Legal Remedies Beyond Court Litigation...
Builder ndash buyer disputes have become one of the most common legal issues in India rsquo s real estate sector Delays in possession unilateral changes in project plans poor construction quality refund refusals and misleading commitments have affected thousands of...
Understanding Section of the Indian Penal Code...
Section of the Indian Penal Code a colonial-era law criminalized unnatural offenses including consensual same-sex relationships However in a historic judgment on September the Supreme Court of India decriminalized consensual homosexual acts between adults marking a significant...
Stubble Burning One Reason For Delhi Air Pollution Says CAQM Supreme Court Seeks Affidavits...
The Supreme Court on Tuesday October asked the Governments of Punjab Haryana Uttar Pradesh Rajasthan and Delhi to file affidavits setting forth the steps they have taken to control air pollution including the measures to curb crop burning This...
Speak With Our
Get a Appointment