Flyers shun agencies to avoid double tax whammy

New Delhi: Air passengers in India are suffering from double instance of service tax when they book tickets via agents, who account for 40% of air ticket sales in the country. Air passengers have to pay a service tax of 12.36% that is levied on air fare on a ticket. But they also have to dole out a 0.61% service tax on domestic air fare booked through travel agents.
Travel agents cry foul as they claim that many customers are going directly to hotels and airlines for bookings rather than booking through them. The travel industry has approached the finance minister to remove the double taxation instance in the upcoming budget. Passengers also have to pay a 1.23% service tax on international airfares booked through agents in addition to the 12.36% service tax already paid on airfare. On the other hand, a service tax of 4.9% is applicable on holiday packages. This is in addition to a service tax of 12.36% paid to the service provider such as a hotel or resort.
28/12/07 Vishakha Talreja & Harsimran Singh/Economic Times

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Categories: General Aviation Dec 2007