Airlines Exempt from GST on Airport Levies PSF and UDF; GST Responsibility Lies with Airport Operators.

The circular clarifies that airport levies, specifically Passenger Service Fee (PSF) and User Development Fee (UDF), are not part of the services provided by airlines and thus should not be subject to GST by airlines. These fees are charged by airport operators for services to passengers and are liable to GST, with the airport operators responsible for its payment. Airlines may act as pure agents, collecting these fees on behalf of airport operators, and should not include them in the value of their services. Airlines must separately indicate these fees and GST in invoices, and passengers may claim Input Tax Credit (ITC) on GST paid.

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