No service tax leviable on user development fees collected by Airport authority, being a statutory levy

Last updated: 23 May 2023

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The Supreme Court has ruled that User Development Fees (UDF) collected by Delhi International Airport Ltd. are statutory levies and not subject to service tax. These fees were collected under Section 22A of the Airports Authority of India Act to fund airport development. The court found that while the collection wasn't mandatory or conditional on treasury deposit, it still qualified as a statutory exaction, distinct from other charges under the Act, and therefore exempt from service tax.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court in the case of Central GST Delhi - III v. Delhi International Airport Ltd (Civil Appeal No. 8996 of 2019 dated May 19, 2023) held that neither is there any compulsion to levy development fee nor is the collection conditional upon its deposit in the government treasury.

Citation :
Central GST Delhi - III v. Delhi International Airport Ltd (Civil Appeal No. 8996 of 2019 dated May 19, 2023)

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