New service tax for air tickets in India

AIR tickets issued in India are now subject to a 10.3 per cent service tax.

  04/07/2010 14:44

All domestic travellers have to pay a 10.3 per cent service tax on the gross value of the ticket – base price, fuel surcharge and congestion fee – or 103 rupees (US$2.21), whichever is lower. The tax on international tickets has been capped at 515 rupees.

The tax collection will be credited to the Government of India service tax account.

Stop-n-Shop chairman Nalin Kapadia believed the new tax would not dampen domestic and outbound traffic. “Air travel is essential for many. The new tax will not make a difference to travellers since there is no choice. Those who have to fly will fly, despite increase in fares.”

In a release, Jet Airways said the service tax of 10.3 per cent on the gross value of tickets for all classes on domestic flights and economy class on international flights will be levied on tickets sold, issued or re-issued.

The government has already been collecting a 12 per cent service charge on foreign travel by business or first class for the past few years.

(Sources: Anand and Madhura Katti, Mumbai, TTGAsia)


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