Club-class international travel may get cheaper soon

New Delhi: Budget 2008-09 may have some good news for air travellers, especially those who travel business and first class. Airfares are likely to come down, with the government planning to scrap service tax on business and first-class tickets for international journeys. It may also halve duties on aviation turbine fuel from 10% to 5%.
The move to withdraw service tax would reduce the price of J and F class tickets on international sectors in the range of Rs 5,000 to Rs 25,000. Duty reduction on ATF would benefit airlines, which would eventually pass on the benefit to passengers irrespective of the ticket category.
Official sources said the finance ministry is favourably considering the civil aviation ministry’s proposal to reduce excise duty on ATF from 8% to 4% and Customs duty from 10% to 5%. Civil aviation minister Praful Patel is aggressively pursuing these two issues with finance minister P Chidambaram.
At present, the government levies a service tax of 12.5% on J and F class tickets on international flights originating from India.
28/12/07 Nirbhay Kumar/Economic Times

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Categories: Foreign Dec 2007, General Aviation Dec 2007