Travel agents, airlines spar over service tax

New Delhi: Travel agents across the country are up in arms against international airlines' decision not to pay them a commission on fuel surcharge even after its inclusion in the services tax ambit recently.
Agents say that with the Government imposing a tax on fuel surcharge, it should now become part of the basic fare on which they get their commission (of around 5 per cent). However airlines are keeping it out of the ambit of the basic fare.
'According to ICAO rules, these surcharges should be part of the basic fare since they are part of the operational costs. However, in the ticket, airlines are disguising the surcharge as an amount paid to the government while it is levied to cover their own operational costs,' said P Sampath Kumar, chairman, legal and industry affairs, Travel Agents Federation of India (TAFI). Including these surcharges in the basic fare would mean that the taxes and commissions would increase
Surcharges levied on fuel, security, congestion, etc are always included under the 'taxes/charges/fees imposed by government authorities' category in a ticket even though revenues earned from these surcharges always go into the airlines' account.
12/10/07 Anirban Chowdhury/Business Standard

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Categories: General Aviation Oct 2007