Service tax on premium travel may go

New Delhi: Frequent fliers hopping to international destinations on premium class may hope for some reduction in fares. The finance ministry is considering a proposal from Indian airlines to remove service tax on first and business class travel to international destinations.
Airlines have argued that removal of service tax on these heads would help them manage their costs better while reducing the ticket prices for international business and first class travellers. Service tax burden increases the cost of international travel in the first and business class by 12.24%.
The industry has also demanded removal of service tax imposed on landing, airport and air navigation charges.
According to industry sources, the airlines have said the tax on business and first class tickets is not a global practice, and it puts India at a disadvantage as a connecting point to other countries.
23/12/06 Sunny Verma/Economic Times

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