Domestic airlines to oppose 10 pc service tax proposal

Mumbai: Domestic airline companies have decided to oppose the finance minister’s proposal to impose nearly 10% of service tax on air travel.
Leading carriers such as Jet Airways, Kingfisher Airlines and Air India will put forth a representation to the ministry of civil aviation as well as the ministry of finance urging them to roll back the proposal, which will otherwise force airlines to raise ticket prices by at least 10%.
The Federation of Indian Airlines (FIA), an apex industry body of carriers, has convened a meeting in Hyderabad on Wednesday to discuss a blueprint for the presentation, its secretary-general, Anil Baijal told ET.
“In addition to the service tax issue, FIA will also put forth a demand so that the aviation industry be treated as part of infrastructure sector. This would mean availability of easy loans for a longer term with lower interest rate for airlines. Also, it would mean tax holiday for the industry,” said a senior airline official with one of the private carriers not wanting to be named.
The budget 2010-2011 has announced that domestic companies will have to pay service tax on all classes of travel.
28/02/10 Manisha Singhal/Economic Times

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Categories: Indian Aviation- In General Feb 2010