Financial Daily from THE HINDU group of publications
Thursday, Mar 02, 2006


Group Sites

Logistics - Budget
Industry & Economy - Airlines

Airlines surprised at new tax proposal

Our Bureau

Move unlikely to have adverse impact: Air India officials

New Delhi , March 1

The Government's decision to levy 12 per cent service tax on international air travel by first or business class has taken a large part of the airline industry by surprise.

"It is clear that the Government is keen to mop up funds from those who are in a position to pay for luxuries. However, why they should also tax business class passengers is puzzling. Nowadays, people travel by business class as it is necessary to meet their business needs and not as a class statement," a senior official of an online travel company said.

Echoing almost similar concerns, the spokesperson of a South-East Asian airline said that this move was not be conducive to the industry's growth. Air India officials, however, said that the move was unlikely to have an adverse impact.

While the Directorate-General of India (DGCA) fares for travel between Mumbai and London in first class are Rs 2,62,000, travel in business class costs Rs 1,86,000.

However, a passenger travelling in economy class will be required to pay as little as Rs 18,000.

The Budget proposal of 12 per cent service tax on international air travel is not applicable to economy class passengers.

More Stories on : Budget | Airlines | Taxation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
AI commences jet fuel price risk hedging

BA to add more flights to Bangalore
Airlines surprised at new tax proposal
Oil cos request AAI to defer awarding AFS licence
Kochi port cuts box handling charges
Vizag handling crosses 50 mt again
Motor cover premium rates to rise
Foreign funds eye Bangalore, Mysore expressway project

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line