Travelling by air will be costlier with the government increasing the service tax rate and withdrawing the exemption earlier provided on the construction of new airports.
Business class fares will go up 3.3 per cent with Finance Minister Arun Jaitley announcing a reduction in the abatement of service tax on business class and first class fares from 60 per cent to 40 per cent. Service tax would now be payable on 60 per cent of the fare for business class.
This is in addition to the increase in tax rate from 12.36 per cent to 14 per cent. The higher tax rate will increase economy class fares, too, by 0.6 per cent.
According to a rough estimate, the increase in business class fare would be little more than Rs 1000 on an average fares between Mumbai and Delhi, an airline executive said.
All the three full service airlines - Air India, Jet Airways and Vistara - offer business class seating on domestic flights.
02/03/15 Business Standard
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Business class fares will go up 3.3 per cent with Finance Minister Arun Jaitley announcing a reduction in the abatement of service tax on business class and first class fares from 60 per cent to 40 per cent. Service tax would now be payable on 60 per cent of the fare for business class.
This is in addition to the increase in tax rate from 12.36 per cent to 14 per cent. The higher tax rate will increase economy class fares, too, by 0.6 per cent.
According to a rough estimate, the increase in business class fare would be little more than Rs 1000 on an average fares between Mumbai and Delhi, an airline executive said.
All the three full service airlines - Air India, Jet Airways and Vistara - offer business class seating on domestic flights.
02/03/15 Business Standard
