The Central Board of Direct Taxes (CBDT), recently issued a circular clarifying that the payment of ‘Passenger Service Fee’ made by an airline to Airport Operator does not attract TDS under section 194I of the Income Tax Act.
The circular is issued in the light of the Bombay High Court judgment in CIT v. Jet Airways (India) Ltd, wherein the Court dismissed a departmental appeal by holding that the payments in the nature of PFS does not attract TDS under the above provision. The above decision was based on the Apex Court ruling in Japan Airlines and Singapore Airlines.
The Circular stated that “The Board has accepted the above view of the High Court of Bombay. Accordingly, it is now a settled position that section 194-1 of the Act, will not – apply on PSF.”
Read the full text of the Circular below.
