Airlines to levy ten per cent Service Tax effective July 1, 2010
28th June 2010
Airlines will levy ten per cent Service Tax on gross value of domestic and international air tickets, effective July 1, 2010, subject to a ceiling of Rs 100 for every domestic and Rs 500 for every international journey in Economy Class. According to a report in The Hindu Business Line, airline officials said that the gross value includes the base price and fuel surcharge. Passenger security fee and airport charges will not be covered for determining the gross value of the ticket. Currently, Service Tax is levied only on First and Business Class international flights taken from India, and there is no Service Tax on domestic flights.
However, the Service Tax will not be applicable on passengers undertaking their journey from the following airports: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura or Bagdogra Airport in West Bengal.
The decision to levy a Service Tax on domestic and all sections of international flights was announced as part of the Union Budget 2010-11.
