The Government of India has imposed a service tax of 10.3 per cent on the gross value of tickets for all classes on domestic flights and economy class on international flights will be levied on tickets sold, issued or re-issued, from today.
Service tax will be calculated on the gross value of the ticket for the calculation of the service tax will include the base price and fuel surcharge in addition to the congestion fee. The Rs. 225 Passenger service fee (PSF) and airport charges like UDF/ADF will be exempted from determining the gross value of the ticket.
All domestic travellers in all travel classes will have to bear a service tax of 10.3% on the gross value of the ticket or Rs. 103 ($2.19 approx), whichever is lower, PER SECTOR. Since the air fare is higher than Rs. 1,000 on any sector one can expect to pay a flat Rs. 103.
On international travel in economy class a service tax of 10.3% on the gross value of the ticket or Rs. 515 ($10.95 approx), whichever is less, will be levied PER JOURNEY. Here again, since most international travel is more than Rs. 5,000 round-trip, one can expect to pay the Rs. 515. In business and first class a service tax of 10.3% without an upper limit is already being levied since the last four years.
The service tax is only applicable on journeys originating in India.
Airline crew travelling on duty and United Nations staff are exempted from paying this service tax, as are passengers travelling to or from the North-Eastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Bagdogra airport in West Bengal. Exemption is also given to journeys originating in the state of Jammu and Kashmir from the airports of Srinagar, Leh and Jammu.
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