Flat service tax on fliers

New Delhi: Finance minister Pranab Mukherjee today offered relief to air passengers by partially rolling back the service tax his budget had proposed on every plane ticket, domestic or international.
The budget had levied a 10 per cent service tax on all airline tickets, but this has now been reduced to a flat Rs 100 per ticket for domestic travellers and Rs 500 per ticket for international passengers.
For instance, if you buy a domestic air ticket for Rs 4,000, you would need to pay just Rs 100 extra rather than the Rs 400 mandated by the original budget proposals. If you buy an international ticket for Rs 50,000, the service tax will now be Rs 500 rather than Rs 5,000.
An Air India spokesperson indicated that as of now, airlines planned to absorb the revised tax and would not raise the fares.
“The small increase of Rs 100 on domestic tickets would have no impact on air ticket prices,” the spokesperson said. “The international travel service tax of Rs 500 would also have no impact.”
Earlier, service tax used to be charged only on foreign travel and that too only for business class or first class.
29/04/10 The Telegraph

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Categories: Indian Aviation- In General Apr 2010