Supreme Court Dismisses Airports Authority’s Appeal Against Service Tax Levy For Cargo Handling

The Supreme Court has dismissed the Airports Authority of India’s (AAI) appeal which challenged the imposition of Service Tax on export cargo handling services. A bench comprising Justices Pankaj Mithal and Prasanna B. Varale held that services provided by AAI in handling export cargo are “taxable services” under the Finance Act, 1994. The Court observed that AAI’s operations in handling export cargo constitute a service and thus fall within the definition in the statute, rather than being immune. The appeal argued that export handling should be exempt or not chargeable under service tax laws, but the Court found that the statutory scheme does not exclude such services from taxation. In rejecting AAI’s position, the Court emphasized that the service rendered there is “export cargo handling” and is clearly covered under the relevant taxable services provisions. Consequently, the demand of service tax is valid. The Court’s decision reaffirms that merely because the service is connected with export operations does not automatically confer exemption, unless explicitly stated by the law.