Service tax jacks up I class intl air fare

New Delhi: The Government decision to impose a 12.24 per cent service tax on first and business class international air travel has put an additional burden of around Rs 9,000 for a passenger travelling business class between India and Singapore to almost Rs 57,800 for a passenger flying first class on the Delhi-Chicago-Delhi sector. The Finance Minister, P. Chidambaram, widened the coverage of service tax in his 2006-07 Bbudget to include international air travel by first and business class. The tax came into force from May 1 this year. The international airline industry, which is already reeling under the burden of growing fuel bill with international oil prices continuously moving up, has vehemently opposed the Government move.
A host of international agencies including the International Air Transport Association (IATA) have also written to the Government on the issue. The Ministry of Civil Aviation is to take up the issue about implementation of the service tax with the Finance Ministry.
07/05/06 Business Line/Sify

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