Air travel to be costlier as AAI passes on tax to airlines

New Delhi, Mumbai: Air travellers may need to fork out more with the Airport Authority of India (AAI) starting to pass on service tax on licence fee charged on offices, duty-free shops, restaurants and other amenities in airports to airlines.
AAI recently paid over Rs 60 crore as tax on the licence fee, after the Central Board of Excise & Customs raised a demand, official sources told FE. This is in addition to the tax on the Rs 200/ticket passenger service fee, which has recently been imposed.
Sources from a leading airline said the industry would now pass on the burden to air travellers by way of increased air fares.
Airport services were brought under the tax net effective September 10, 2004. AAI had initially refused to pay the tax on basic services like route and terminal navigational facilities, the main sources of its income.
25/07/06 KG Narendranath & Neelasri Barman/Financial Express

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