Latest news with #K.V.Viswanathan
&w=3840&q=100)
Business Standard
14-07-2025
- Business
- Business Standard
Supreme Court dismisses tax demand raised by CBIC against IndiGo
The Supreme Court on Monday dismissed a plea by the Central Board of Indirect Taxes and Customs (CBIC) against InterGlobe Aviation, the parent company of India's largest airline, IndiGo, seeking to impose integrated goods and services tax (IGST) on re-imported aircraft and parts sent overseas for repairs. The tax demand was based on a 2021 government notification that sought to clarify and retrospectively amend a 2017 exemption. The government had challenged the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) ruling of August 2024, which rejected the retrospective tax demand, stating that it would place an additional burden on airlines. A bench comprising Justices B.V. Nagarathna and K.V. Viswanathan on Monday refused to admit the customs department's appeal and dismissed it. Additional Solicitor General (ASG) N. Venkataraman, appearing for the customs department, argued that nearly ₹100 crore in tax revenue was at stake. He also submitted that the interpretation of the 2017 notification is already under challenge before the Supreme Court. 'Even if the 2021 notification is struck down for being retrospective, our case survives because duties of customs under the 2017 notification include IGST. All I am requesting is that if we win on the 2017 notification, the benefit of that ruling should apply to these bills [and] other imports as well,' he said. The court, however, rejected the argument, stating: 'You can't do it by a retrospective amendment… If the 2017 notification did not cover IGST, you cannot use the 2021 notification to impose it retrospectively.' The government has announced that a uniform IGST rate of 5 per cent on all aircraft and aircraft engine parts will come into effect from 15 July. Last week, the 53rd GST Council recommended a uniform 5 per cent tax on imports of parts, components, testing equipment, tools, and toolkits of aircraft, irrespective of their HSN code. The aim is to reduce operational costs, resolve tax credit issues, and attract investment. IndiGo has also challenged the constitutionality of the 2021 notification before the Delhi High Court. On 4 March, the High Court struck down the additional tax imposed on the repair cost of goods re-imported into India after being sent abroad for maintenance. The airline's parent company argued that it had already paid import duties on overseas repairs as part of the import of services and should not be taxed again upon the re-import of the repaired aircraft parts. IndiGo, which is principally engaged in the transportation of passengers and goods by air within and outside India, sends its goods to maintenance, repair, and overhaul (MRO) service providers outside the country. Once repaired, the goods are re-imported. S.R. Patnaik, Partner and Head of Taxation Practice at law firm Cyril Amarchand Mangaldas, said the Supreme Court's decision to dismiss the revenue's plea reinforces a vital principle in tax jurisprudence—that retrospective tax demands must pass the test of fairness and legal certainty. 'This ruling provides much-needed reassurance to businesses that tax exemptions, once validly claimed, will not be reopened by retrospective changes. It will likely influence how courts approach other cases involving retrospective levies, and hence, it is expected that the tax authorities shall use their powers in a more restrained manner,' he said. 'This precedent strengthens challenges in sectors like online gaming, where the retrospective levy of GST on the face value of bets is under judicial scrutiny. The ruling signals that tax certainty cannot be achieved by imposing obligations retrospectively, a development that certainly restores hope among taxpayers,' said Karan Sarawagi, an advocate practising in the Bombay High Court. 'The Supreme Court's decision is rooted in the jurisprudential principle that notifications are inherently prospective in nature. Since this was a notification and not a legislative clarification, its applicability should always be considered prospective, starting from the date of its publication in the official gazette,' said Sachin Sharma, Managing Partner of KSV Tax Consultants.
Time of India
14-07-2025
- Business
- Time of India
Supreme Court relief for IndiGo & SpiceJet: No retrospective IGST on reimported aircraft parts
In a relief to airlines InterGlobe Aviation and SpiceJet Ltd, the Supreme Court on Monday dismissed the customs department's appeal seeking to levy integrated goods and services tax (IGST) retrospective on reimport of aircraft or aircraft parts into India after their repairs outside the country. The department claimed that an amended notification issued in 2021 would have retrospective effect from the original exemption notification of 2017, a stand rejected by a bench comprising Justices B.V. Nagarathna and K.V. Viswanathan. "You can't do it by a retrospective amendment…If the 2017 notification did not cover IGST, you cannot use the 2021 notification to impose it retrospectively,' the bench said. In the 2017 notification, due to exemptions, the airlines were required to only pay 'duty of customs' on the fair cost of repairs and the cost of insurance and freight charges, both ways and not the integrated tax. However, in the 2021 notification, the government said that the airlines were required to pay integrated tax, in addition to the basic customs duty, on the fair cost of repairs and the cost of insurance and freight charges. The department told the SC that InterGlobe, the parent of India's largest airline IndiGo , and SpiceJet had to pay the integrated tax also for 2017 to 2021, which otherwise was not leviable under the un-amended 2021 notification. In August, Customs, Excise and Service Tax Appellate Tribunal ruled that the 2021 notification was not retrospective in nature. Live Events It may be noted that the Delhi High Court in March had declared as unconstitutional the levy of IGST on reimported aircraft engines and aircraft parts that were repaired and serviced abroad. While setting aside a part of the 2021 customs department's exemption notification that imposed IGST and cess on the repair cost of such reimported goods, the HC said the July 2021 notification that 'purports to levy an additional levy over and above the IGST imposed under Section 5(1) (of IGST) by adding the words '...tax and cess' is declared unconstitutional, ultra vires the IGST and is quashed to the aforesaid extent.' It said that an integrated tax on the import of services can only be imposed under Section 5(1) of the IGST and that a supply of service once so classified cannot be recharacterised. On the Central Board of Indirect Taxes and Customs' clarification issued through the July 2021 circular, the HC said the addition of the words "tax" and "cess" over and above customs duty which was originally conceived and provisioned in 2017 notification was "clearly ultra vires" and liable to be declared as an intent to levy an "impost" which is without authority of law. Terming the tax authorities' contention about the existence of two separate and distinguishable taxable events as clearly "untenable," the HC said the transaction remained that of supply of services in the shape of repair or refurbishment. It clearly did not constitute a supply of goods, the court said. The HC ruling had come in response to several petitions filed by InterGlobe Aviation challenging the notification and IGST levy on re-imported aircraft and parts after repairs.
&w=3840&q=100)
Business Standard
14-07-2025
- Business
- Business Standard
'No retrospective amendment': SC dismisses CBIC tax demand on IndiGo
The Supreme Court on Monday dismissed a plea by the Central Board of Indirect Taxes and Customs (CBIC) against InterGlobe Aviation, the parent company of India's largest airline, IndiGo, seeking to impose integrated goods and services tax (IGST) on re-imported aircraft and parts sent overseas for repairs. The tax demand was based on a 2021 government notification that sought to clarify and retrospectively amend a 2017 exemption. The government had challenged the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) ruling of August 2024, which rejected the retrospective tax demand, stating that it would place an additional burden on airlines. A bench comprising Justices B.V. Nagarathna and K.V. Viswanathan on Monday refused to admit the customs department's appeal and dismissed it. Additional Solicitor General (ASG) N. Venkataraman, appearing for the customs department, argued that nearly ₹100 crore in tax revenue was at stake. He also submitted that the interpretation of the 2017 notification is already under challenge before the Supreme Court. 'Even if the 2021 notification is struck down for being retrospective, our case survives because duties of customs under the 2017 notification include IGST. All I am requesting is that if we win on the 2017 notification, the benefit of that ruling should apply to these bills [and] other imports as well,' he said. The court, however, rejected the argument, stating: 'You can't do it by a retrospective amendment… If the 2017 notification did not cover IGST, you cannot use the 2021 notification to impose it retrospectively.' The government has announced that a uniform IGST rate of 5 per cent on all aircraft and aircraft engine parts will come into effect from 15 July. Last week, the 53rd GST Council recommended a uniform 5 per cent tax on imports of parts, components, testing equipment, tools, and toolkits of aircraft, irrespective of their HSN code. The aim is to reduce operational costs, resolve tax credit issues, and attract investment. IndiGo has also challenged the constitutionality of the 2021 notification before the Delhi High Court. On 4 March, the High Court struck down the additional tax imposed on the repair cost of goods re-imported into India after being sent abroad for maintenance. The airline's parent company argued that it had already paid import duties on overseas repairs as part of the import of services and should not be taxed again upon the re-import of the repaired aircraft parts. IndiGo, which is principally engaged in the transportation of passengers and goods by air within and outside India, sends its goods to maintenance, repair, and overhaul (MRO) service providers outside the country. Once repaired, the goods are re-imported. S.R. Patnaik, Partner and Head of Taxation Practice at law firm Cyril Amarchand Mangaldas, said the Supreme Court's decision to dismiss the revenue's plea reinforces a vital principle in tax jurisprudence—that retrospective tax demands must pass the test of fairness and legal certainty. 'This ruling provides much-needed reassurance to businesses that tax exemptions, once validly claimed, will not be reopened by retrospective changes. It will likely influence how courts approach other cases involving retrospective levies, and hence, it is expected that the tax authorities shall use their powers in a more restrained manner,' he said. 'This precedent strengthens challenges in sectors like online gaming, where the retrospective levy of GST on the face value of bets is under judicial scrutiny. The ruling signals that tax certainty cannot be achieved by imposing obligations retrospectively, a development that certainly restores hope among taxpayers,' said Karan Sarawagi, an advocate practising in the Bombay High Court. 'The Supreme Court's decision is rooted in the jurisprudential principle that notifications are inherently prospective in nature. Since this was a notification and not a legislative clarification, its applicability should always be considered prospective, starting from the date of its publication in the official gazette,' said Sachin Sharma, Managing Partner of KSV Tax Consultants.
Mint
14-07-2025
- Business
- Mint
SC dismisses retrospective integrated GST demand on aircraft repairs abroad
New Delhi: In a relief for airlines such as IndiGo and SpiceJet, the Supreme Court on Monday dismissed a plea by the customs department seeking to impose integrated goods and services tax (IGST) on re-imported aircraft and parts sent overseas for repairs. The tax demand was based on a 2021 government notification that sought to clarify and retrospectively amend a 2017 exemption. Under the original 2017 notification, airlines were required to pay only basic customs duty (BCD) on the cost of repairs, freight, and insurance when re-importing aircraft parts after overseas maintenance. In 2021, the government clarified that IGST was also applicable on the repair value and freight—and attempted to apply this retrospectively to past imports. A bench comprising Justices B.V. Nagarathna and K.V. Viswanathan on Monday refused to admit the customs department's appeal against an 5 August 2024, ruling by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). The tribunal had rejected the retrospective tax demand, holding that it would place an additional burden on airlines. 'I do not have a problem in dismissing…Civil appeal dismissed,' the bench said. During the hearing, additional solicitor general (ASG) N. Venkataraman, appearing for the customs department, argued that nearly ₹ 100 crore in tax revenue was at stake. 'This is high tax, ₹ 100 crore…I need this appeal to be admitted,' he said. The ASG also submitted that the interpretation of the 2017 notification is already under challenge before the Supreme Court. He contended that even if the 2021 clarification is struck down for being retrospective, IGST could still be imposed based on the 2017 notification, which he argued already included such a tax under the phrase 'duties of customs.' 'If we succeed on the interpretation of the 2017 notification, then these 1,800 bills of entry will automatically be covered. Even if the 2021 notification is struck down for being retrospective, our case survives because duties of customs under the 2017 notification include IGST. All I am requesting is that if we win on the 2017 notification, the benefit of that ruling should apply to these bills as well,' he added. The court, however, rejected the argument, observing: 'You can't do it by a retrospective amendment…If the 2017 notification did not cover IGST, you cannot use the 2021 notification to impose it retrospectively.' The '1,800 bills' refer to bills of entry—import declarations filed by airlines with Customs for each shipment of aircraft parts or aircraft re-imported after repairs abroad. As of July 2024, India imposes a uniform IGST rate of 5% on all imports of aircraft components, engine parts, and MRO (maintenance, repair and overhaul) items, as part of efforts to promote the aviation sector. The dispute originated after the rollout of goods and services tax (GST) on 1 July 2017. Prior to GST, airlines sending aircraft parts or engines abroad for repairs paid BCD and countervailing duty (CVD) only on the cost of repairs, freight, and insurance—not on the full value of the parts. Post-GST, Notification No. 45/2017-Customs (dated 30 June 2017) continued this exemption structure. It required payment of 'duty of customs' on the cost of repairs plus insurance and freight, but did not mention IGST. Airlines such as IndiGo and SpiceJet interpreted this as an exemption from IGST, paying only BCD. Customs authorities, however, argued that 'duty of customs' included IGST under the GST regime, and began raising demands for IGST payment on such re-imports from August 2017 onwards. Airlines challenged these demands before CESTAT. In November 2020, CESTAT ruled in favour of the airlines, holding that IGST was not payable under the 2017 notification since it was not explicitly included. The government then challenged this ruling in the Supreme Court, which admitted the customs department's appeal. That case remains pending. After the Supreme Court admitted the customs department's appeal, the government issued Notification No. 36/2021-Customs on 19 July 2021, amending the earlier notification to specifically include IGST and compensation cess, and inserting an explanation that this was always intended to apply. Customs then attempted to levy IGST retrospectively for the period from 1 July 2017 to 18 July 2021 based on this amendment. This move was again challenged by airlines before CESTAT, which in August 2024 ruled in their favour and struck down the retrospective tax demand. That CESTAT ruling was the subject of Monday's dismissal by the Supreme Court. Separately, IndiGo has also challenged the constitutionality of the 2021 notification itself before the Delhi High Court. On 4 March 2025, the high court ruled in favour of the airline, declaring unconstitutional a portion of the 2021 notification that sought to impose IGST and cess on the repair cost of goods re-imported into India after overseas maintenance. That ruling has not yet been challenged by Customs in the Supreme Court.
The Hindu
03-07-2025
- Health
- The Hindu
Committee suggests easing of purchase procedures at MCH
The four-member committee instituted by the government to look into the systemic issues raised by the Head of Urology department at the Thiruvananthapuram Government Medical College Hospital (MCH), which had led to the postponement of surgical procedures in the department, has suggested that the procedures for institutional local purchase of equipment/accessories of machines may be simplified so that the procurement is not delayed, it is learnt. The report was submitted by the committee, led by B. Padmakumar, Principal of Alappuzha Medical College, to the DME-in-charge, K.V. Viswanathan, on Wednesday evening. Dr. Viswanathan said that the report could not be submitted to Health Minister Veena George on Thursday as she had been attending the zonal review meeting of the government at Kottayam in the morning, after which she was busy handling the crisis at the Kottayam MCH following a building collapse. The report was apparently a 'mixed bag', with the committee pointing out that while some of the issues that led to the face-off involving Urology HoD Haris Chirackal could have been prevented, there were many aspects relating to the purchase processes in MCHs which could be improved. 'Doctor violates rules' The committee has, however, pointed out that by going public with his grievances and his commentary on the bureaucracy Dr. Chirackal violated provisions of the Kerala Service Rules which prohibits government servants from publicly discussing or criticising the policies or actions of the government. The committee had taken statements from other heads of departments too on the manner of equipment/accessories purchase, process delays they encountered, and how the systemic issues were affecting patient care and service delivery. It had also gone through the purchase files at the Thiruvananthapuram MCH over the past one year. Faculty members who gave their statements before the committee had spoken about how the government's failure to reimburse public hospitals for free treatment provided under Karunya Arogya Suraksha Padhati was impoverishing the hospital development committees that were responsible for enabling the free treatment under KASP. More wear and tear Also, because of the huge demand on the diagnostic and interventional procedures offered by the superspecialty departments in the hospital, machines were often run round-the-clock. This led to increased wear and tear and frequent requirement for the purchase of accessories. The committee is thus learnt to have recommended smoothening out several purchase process hurdles so that service delivery was never affected. The report is likely to be submitted to the Health Minister on Friday.
