Airlines not charging service tax on tickets

Hyderabad: If travelling by air, you better book your flight tickets directly from the carrier rather than taking the travel agent route. At least for time being. As travel agents and airline carriers -- both international and domestic -- are in the midst of moving from a zero commission to service fee model, passengers booking through any of the 2,300 travel agents across the country have to shell out extra money over and above the basic fare and taxes.
For instance, a ticket from Kingfisher Airlines Hyderabad to Bengaluru will cost you Rs 3,204, while the same when booked through an agent will cost Rs 3,357. The difference in pricing is due to the service tax -- 0.6 per cent of the basic fare in case of domestic bookings and 1.2 per cent for international bookings.
Miffed by the airlines stance forcing agents to charge service tax, the Travel Agents Association of India (TAAI) recently moved the Andhra Pradesh High Court, appealing airlines and the Government to include service tax component as part of the ticket. “We filed a petition and the case is slated for hearing in June,’’ said Vijay Mohan Raj, Chairman (Communications) of TAAI.
Until recently, carriers used to pay a 5 per cent commission to travel agents on the total fare sales. This means, passengers booking tickets either from the carrier or through the agent, were charged the same amount. But due to declining passenger traffic and the ongoing economic crisis, all the 14 international carriers including Singapore Airlines (SIA), Delta, British Airways and Lufthansa stopped paying commission to agents.
04/05/09 ExpressBuzz

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Categories: Indian Aviation- In General May 2009