Airline’s payment for lounge services not rent

The Mumbai Income Tax Appellate Tribunal (ITAT), in its recent order, has held that payments made by Qantas Airways, an international airline, to another party for providing lounge and catering services was not rent. Thus the higher rate of tax to be deducted as determined by the tax authorities was not applicable.

Qantas won the appeal in respect of four consecutive years beginning from fiscal 2007-08.

Most airlines provide for lounge facilities at airports for their premium passengers who are waiting for their flights. Qantas had entered into an agreement with Oberoi Flight Services (OFS) for providing lounge services, which included providing an assortment of snacks, alcoholic and non-alcoholic drinks to its first class and club class passengers.

Full report here Times of India 


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