Airlines surprised at new tax proposal

New Delhi: The Government's decision to levy 12 per cent service tax on international air travel by first or business class has taken a large part of the airline industry by surprise.
"It is clear that the Government is keen to mop up funds from those who are in a position to pay for luxuries. However, why they should also tax business class passengers is puzzling. Nowadays, people travel by business class as it is necessary to meet their business needs and not as a class statement," a senior official of an online travel company said.
Echoing almost similar concerns, the spokesperson of a South-East Asian airline said that this move was not be conducive to the industry's growth. Air India officials, however, said that the move was unlikely to have an adverse impact.
02-03-06 sify

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