Air travel will turn dearer from July

New Delhi: Starting from next month onwards air travel will become costlier as the Centre, on Thursday, proposed to impose modified service tax on air tickets both for domestic as well as international flights.
At the same time, the government proposed to exempt a slew of services like construction of certain low-cost housing, services within ports and airports and power distribution from the ambit of Service Tax with effect from July 1.
Application of modified Service Tax on air travel as well as the proposed exemptions will come into effect from July one, the Central Board of Excise and Customs (CBEC) said through plethora of notifications issued here on Thursday to give effect to various provisions in the Finance Act 2010.
Finance Minister Pranab Mukherjee in the Budget 2010-11 had proposed imposition of Service Tax on international and domestic air passengers. This had led to disappointment in the air travel industry. Responding to grievances of the air industry Mukherjee while replying to debate on Finance Bill 2010 clarified that effective rates of levy would be a maximum of Rs 100 per travel for domestic journey in any class and a maximum of Rs 500 per travel for international journey by economy class.
24/06/10 Deccan Herald

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Categories: Indian Aviation- In General Jun 2010