A United States judge on Monday struck down a $1,00,000 fee that had been imposed by President Donald Trump on new H-1B visas, holding that it amounted to an unlawful tax that Congress had not authorised, Reuters reported.

US District Judge Leo Sorokin passed the verdict in response to a lawsuit filed by Democratic state attorneys general challenging a fee Trump announced in September requiring companies to pay $100,000 for each new H-1B worker visa. These non-immigrant visas allow US companies to temporarily employ highly skilled foreign workers in specialty occupations.

The Trump administration argued that the fee was a lawful monetary penalty that the president was authorised to impose under federal immigration law, the news agency reported. The law allows the president to restrict the entry of foreign citizens if he considers it detrimental to American interests.

However, the judge held that the fee was not a penalty, but a tax, for which the president did not have authorisation from Congress, and which the US State Department and Citizenship and Immigration Services could not implement.

“Here, the substance and application of the $100,000 payment reveal that ​it is a tax, regardless of what the payment is called,” Reuters quoted Sorokin as saying in his ruling.

The Trump administration said that it would appeal the ruling.

White House Spokesperson Taylor Rogers told CNBC that Trump has “clear legal authority to restrict entry of any class of aliens he determines is not in America’s best interests, and that is exactly what he did”.

“The H-1B program has been abused for decades, and President Trump finally took action to fix it,” Rogers was quoted as saying. “A federal judge in Washington already upheld a nearly identical order, and the administration is confident this order will be reversed on appeal.”

Around 85,000 new H-1B visas are issued annually.

Over the past few years, Indians have constituted the majority of H-1B visa holders. Indians comprised 71% of all H-1B visas issued by the US in the financial year 2023-’24.

Prior to the fee announced by Trump in September, it cost companies $215 to register for the H-1B visa lottery, besides several filing fees.

Few employers have paid Trump’s fee since it was instituted, Reuters reported. As of February 15, the US Citizenship and Immigration Services had received just 85 payments of the $100,000 fee, an the news agency quoted the Trump administration as saying in a March filing.

Edited by Tanya Shrivastava.