In a relief to InterGlobe Aviation and SpiceJet, the Supreme Court has rejected review petitions filed by the customs department seeking to impose retrospective integrated goods and services tax on reimport of aircraft or aircraft parts into India after their repairs outside the country.
“Having carefully gone through the review petitions, the order(s) under challenge and the papers annexed therewith, we are satisfied that there is no error apparent on the face of the record or any merit in these review petitions, warranting reconsideration of the order impugned. The review petitions are, accordingly, dismissed,” a bench comprising Justices BV Nagarathna and KV Viswanathan held.
In July, the apex court had dismissed the department’s appeal that claimed that an amended notification issued in 2021 would have retrospective effect from the original exemption notification of 2017, a stand that was rejected by the bench then. “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.
Now, a plea seeking review of the July judgment has also been rejected.
The Delhi High Court in March last year had also declared as unconstitutional the levy of IGST on reimported aircraft engines and aircraft parts that were repaired and serviced abroad.
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 said that that InterGlobe 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.
