Air India CRS Services Taxability Dispute: Delhi High Court Dismisses CGST Appeal As Not Maintainable

The Delhi High Court has dismissed as not maintainable an appeal filed by the CGST Department against a CESTAT order concerning the taxability of services provided to Air India by computer reservation system (CRS) companies.

The Division Bench of Justices Avneesh Jhingan and Shail Jain held that the dispute concerns the taxability of the services, and the appeal therefore falls within the appellate jurisdiction of the Supreme Court under Section 35L of the Central Excise Act, 1944.

The dispute arose from whether services provided by CRS companies to Air India were taxable on a reverse-charge basis under the category of “online information and database access or retrieval” services under the Finance Act, 1994.

The Centre had argued that only appeals involving questions relating to the rate of duty could be taken to the Supreme Court, and that questions of taxability or classification did not fall within Section 35L.

Rejecting this contention, the High Court said Section 35L(1)(b) could not be read in isolation from Section 35L(2), which provides that the determination of a question relating to the rate of duty includes the determination of taxability or excisability for assessment.

The Court observed that the issue before the Tribunal concerned the taxability of services provided to Air India by CRS companies.

As such, it dismissed the appeal as not maintainable.

For Appellant: Advocates Anurag Ojha, SSC with  Dipak Raj, Aditya Chaudhary, Ashish Chaudhary

For Respondent: Advocates Yogendra Aladak and Yatharth Tripathi