No service tax on transit travel

New Delhi: International and domestic air travel becomes costlier this month onwards with an additional burden of service tax, announced in the Budget. However, globetrotters who stop over in India during a transit flight can avoid paying this tax, provided they refrain from venturing out of the customs area.
While issuing a notification on the new service tax, the government has exempted certain categories of air travelers from it. The tax is otherwise 10% on the gross value of the ticket or Rs 100 for domestic travel in any class and Rs 500 for international travel in economy class, whichever is less.
Going by the notification, a person who arrives in India in a transit flight is exempted from paying this additional levy, “provided he does not pass through immigration, does not leave the customs area and continues his journey to a place outside India.”
Usually, people who take transit flights or connecting flights through India schedule engagements —business or tourism--- in India for their convenience. Now, this would result in an additional burden of around Rs 500 as a traveller would have to leave the customs area for any such engagements.
06/07/10 Tanu Pandey/Financial Express

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Categories: Foreign Jul 2010, Indian Aviation- In General Jul 2010