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The Hindu
13 hours ago
- Politics
- The Hindu
K.S. Aiyar Memorial Lecture at IIPA on Aug 2
The Indian Institute of Public Administration (IIPA), Karnataka Regional Branch, will host the K.S. Aiyar Memorial Lecture on August 2. Justice B.V. Nagarathna of the Supreme Court of India will deliver the lecture on the theme 'Good Governance under the Constitution of India.' Karnataka Chief Secretary Shalini Rajneesh will be the chief guest. The event will be held at 4 p.m. at the Multipurpose Hall, Infantry Road.
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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.
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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.
The Hindu
14-07-2025
- Politics
- The Hindu
Citizens must know value of freedom of speech, says SC as it mulls guidelines on expression
The Supreme Court on Monday (July 15, 2025) said citizens must know the value of freedom of speech and expression and observe self regulation as it mulled guidelines to regulate offensive posts on social media. A Bench comprising Justices B. V. Nagarathna and K. V. Viswanathan was hearing a plea of one Wazahat Khan booked in FIRs in several states, including West Bengal, for his objectionable posts on X against a Hindu deity. On June 23, the top court granted him interim protection from coercive action till July 14. Mr. Khan had filed a complaint against another social media influencer Sharmistha Panoli for allegedly making communal remarks in a video. Offensive comments should not be made in response to similar posts, his lawyer said in court. 'The citizens must know the value of the fundamental right of freedom of speech and expression. The State can step in case of violations… Nobody wants the State to step in (sic),' Justice Nagarathna said. The judge continued, 'All this divisive tendency on social media has to be curbed.' The Bench clarified it did not mean censorship. "There should be fraternity among citizens," the Bench said, as it considered framing guidelines on freedom of speech and expression for citizens. The Bench underlined the reasonable restrictions under Article 19 (2) of the Constitution on freedom of speech and expression, saying they had "rightly been placed". The Bench, in the meantime, extended the interim protection from arrest to Mr. Khan till the next hearing in the case and asked the counsel to assist it in dealing with the larger issue of self regulation of freedom of speech and expression of citizens. Mr. Khan was arrested by Kolkata Police on June 9. He moved the apex court alleging that FIRs and complaints have been lodged against him in several States, including Assam, West Bengal, Maharashtra and Haryana, for certain old tweets made by him. The FIRs were in retaliation to a complaint filed by him against Ms. Panoli, who was arrested and later released on bail, he argued. "I have deleted all of them and apologised," his counsel said, submitting Mr. Khan was perhaps "reaping what he has sown". His counsel argued that the first FIR, according to the petitioner, was dated June 2.
