Service tax on air travel hampering tourism, Indian official says

The Civil Aviation Ministry in India has expressed concern over the impact of imposition of service tax on air travel on tour and travel business. Indian Civil Aviation Minister Praful Patel, in conjunction with the Tourism Ministry, is gearing up to take up the issue with India’s Finance Minister P Chidambaram, asking him to reconsider the decision to impose service tax on air travel.
Service tax is now being charged on flying business class and first class on any airline.
Foreign airlines fear the 12.24 percent service tax may push passengers to buy tickets abroad and it is also being felt that proposal could also see passengers opting for economy class on short-haul flights.
19/09/06 Satish Gupta l eTN Asia, TravelVideo.tv (press release)

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