Facts: The assessee held a permit issued by the Director General of Civil Aviation (DGCA), New Delhi to operate ‘Non-Scheduled Air Transport (passenger/cargo/charter)’. It had been permitted to use its helicopter of type Bell-407 having a sitting capacity of 6 passengers. The helicopter was made available to various entities for their use as per the terms and conditions of the agreement between them. While providing the said helicopter on charter hire, the assessee supplied its own crew, i.e., Pilot and other flight staff. The maintenance and upkeep of the aircraft was the responsibility of the assessee. For these services, the assessee received certain amount as per the terms and conditions entered into with the chartering parties. The agreement included the route and the estimated flying cost which was determined on the basis of the flying time. There were other components of the charge such as landing charges, parking charges, etc. No tickets were issued for such journey.
Issues Involved: The assessee claimed that the activity carried out by it would be liable to service tax under the category of ‘transportation of passenger by air’ within India under section 65(105) (zzzo), which became liable for payment of service tax for journey within India only with effect from 1-7-2010.
Held: As Per CESTAT, New Delhi branch, where assessee held a permit issued by Director General of Civil Aviation, New Delhi to operate ‘Non-Scheduled Air Transport (passenger/cargo/charter)’ and it gave its complete helicopter on hire to various entities for their use and supplied along with pilot and necessary engineering crew to operate helicopter, services provided by assessee would fall under category of ‘supply of tangible goods service’ under section 65(105) (zzzzj) and not under category of ‘transportation of passenger by air’ under section 65(105) (zzzo).
Citation: [2018] 96 taxmann.com 557 (New Delhi – CESTAT)