Business, first class fliers to pay service tax on fuel surcharge

Business and first class travel on international flights out of India will cost Rs800 to Rs1,200 more from Tuesday for a round trip.
This follows a circular issued by the finance ministriy to airlines operating international flights out of India to levy 12.36% service tax on the fuel surcharge they impose on every business class and first class ticket.
The circular does not say anything about levying service tax on fuel surcharge on economy class tickets.
The fuel surcharge, which passes on the burden of any increase in the price of aviation turbine fuel, or ATF, on to the passenger, was previously not under the ambit of service tax. However, basic fares already come under the ambit of service tax.
With companies usually passing on service tax to the user, a Mumbai-London-Mumbai trip on business class on British Airways or Jet Airways will cost Rs800 more as the fuel surcharge is around Rs6,000. And a business-class passenger on the Mumbai-New York-Mumbai sector will have to shell out an additional Rs1,200 as the fuel cess on such tickets is around Rs10,000.
International airlines have already started sending instructions to travel agents on the increased fares.
A senior Air India executive, who did not want to be named, confirmed thedevelopment.
18/09/07 P.R. Sanjai/Livemint

To Read the News in full at Source, Click the Headline

Categories: Foreign Sep 2007, General Aviation Sep 2007