CUTE entitled for Export Obligation.
CUTE stands for Common User Terminal Equipment Counters in airports and the good DGFT has clarified that charges received from foreigners for such CUTE charges are eligible for discharge of Export Obligation.
The following payments received in Free Foreign Exchange (FEE) by Airport Service Provider for the services rendered to foreign Airlines/foreign nationals are eligible for EO discharge under EPCG Scheme.
1. Aircraft landing and parking charges, from foreign airlines.
2. Land and space rentals, warehousing charges, demurrage charges, de-stuffing, X-ray, carting, and packing charges from foreign airlines.
3. Common user terminal equipment (CUTE) counter charges from foreign airlines.
4. Passenger Service Fee, only for the part collected through domestic or foreign airlines from foreign nationals alone.
5. Payment received from ground handlers by airport service provider, provided ground handler does not count the same towards their own EO fulfilment and gives a disclaimer to that effect under EPCG.
Now will the Service Tax Department consider these as export of services?
DGFT has also clarified that the following payments are not eligible:-
1. Licence fee or rentals paid by Trade Concessionaires (TCs) to airport service providers.
2. Payment received from duty free shop operators by airport service provider.
3. Security portion of passenger service fee.
4. Cargo handling service charges etc., so far as they pertain to Indian consumer (who pays for it).
DGFT Policy Circular No. 24 (RE-2008) 2004-09, Dated: August 04, 2008