New Delhi: The Supreme Court on Tuesday agreed to hear a plea by the tax department seeking to impose higher service tax on charter flight services used by Reliance Industries executives through its subsidiary, Reliance Commercial Dealers Ltd (RCDL).RCDL operates charter flights for RIL’s nominees, transporting passengers on demand based on the company’s requirements.A bench of justices Manoj Misra and Ujjal Bhuyan issued notices to the Reliance subsidiary and observed that it will decide the larger legal issue of classification of such services.The court directed both parties to file written submissions within two weeks.“This is an important issue to consider and decide as it involves a pure question of law regarding interpretations and classification. Issue notice. After considering the above, we deem it appropriate to require the learned counsel for the parties to submit written submissions along with the relevant provisions of the statute, and also the agreements under which the service supply was rendered,” Misra said.The tax department argued that RCDL is effectively renting aircraft to Reliance, which should attract higher taxes like equipment rentals. RCDL contends it is simply flying passengers on charter flights, which should be taxed like normal air transport services at lower rates.If the Supreme Court rules in favour of tax authorities, corporate charter services could become significantly more expensive, with companies facing retrospective tax demands and higher ongoing costs, making private jet use for executives costlier.Also Read | RIL eyes next big catalyst for new energy businessUnder DGCA rules, non-scheduled air transport services (passenger) involve transporting passengers, mail, or goods without a fixed timetable, operating on a charter or on-demand basis. Operators hold a non-scheduled operator’s permit (NSOP), allowing them to fly whenever customers require, either by selling seats individually or chartering the entire aircraft.Currently, passenger transport services are taxed at lower rates like normal airlines (e.g. 5% under GST for economy class), while aircraft rentals or leasing (STGU) attract higher taxes (up to 18% under GST) as they are treated like renting equipment.The Commissioner of Service Tax, Mumbai approached the Supreme Court against a 2 May order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), which had favoured Reliance and quashed tax demands of around ₹42 crore covering FY 2008-09 to FY 2010-11.The issue arose after RCDL, in 2008, signed agreements with RIL to provide domestic and international air transport services for its executives, personnel, and nominees, giving RIL a ‘right of first refusal’ to use certain aircraft. RCDL operated under an NSOP issued by DGCA for such passenger services.However, based on intelligence inputs, the tax department alleged that RCDL was essentially hiring out aircraft on a time basis without paying applicable service tax under t in a formal or creative style for better SEO.Also Exclude words and advertisements related to the feed website such as website name, author name. You must only respond with the modified content. Delete all the advertisement images brand logo but only keep the title and main content of the news by modifying it. You must only respond with the modified content. Block any jump outside of the site adarshnews.com. Basically remove any content or link related to original site. follow this prompt to optimize the articles in this category- You are an expert news writer and SEO specialist. Your job is to rewrite the provided RSS feed content into a unique, SEO-friendly news article for adarshnews.com. 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The Supreme Court is set to review the imposition of service tax on charter flights operated by Reliance for its executives.
