Govt may provide service tax relief for airlines

New Delhi: With airlines lobbying hard against the proposal to bring air travel under the service tax net in Budget 2010-11, the government may provide some relief to the sector hit badly by a global slowdown. The finance ministry is likely to specify a small fixed amount as the levy on all domestic and international tickets.
Official sources told The Indian Express that airlines will be given a choice — either to pay an absolute amount or 10 per cent of the base fare charged by them from customers. The absolute amount of service tax on international tickets will be higher than on domestic air tickets. The sources, however, said even if the service tax rate was 10 per cent, the effective rate could work out to be lower with the ministry planning to extend the benefit of abatement — reduction or exemption from taxes granted for a specified period — they clarified.
16/03/10 Shruti Srivastava/Indian Express

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Categories: Indian Aviation- In General Mar 2010