In what comes as a relief to private airport operators, the Delhi bench of the service tax tribunal has set aside the service tax demand of over Rs 262 crore on the Delhi International Airport (DIAL) for collecting ‘development fee’ from the passengers.
The tribunal, in its order last month, held that development fee was levied for future development of the airport and not in lieu of any service.
The Rs 262-crore service tax demand was upheld by the adjudicating authority of the revenue department in 2016.
Thereafter, DIAL had deposited Rs 130 crore under protest. However, the amount was appropriated by the service tax authorities as interest and penalties on the demand.
