Air travel on international routes from India on business and first class is set to become more expensive from May 1 this year due to the government levying service tax to the tune of 12 per cent. The International Air Travel Association (IATA) has opposed the government’s move.
"Levying of service tax of 12 per cent will counter India’s efforts to increase tourist arrivals. People flying out of the country will now prefer buying tickets from abroad rather than from India," IATA country manager Robey Lal told this newspaper.
"The government proposes to levy this tax from May 1 this year. This is also giving rise to problems in operationalising the notification due to inadequate time available," Mr Lal emphasised.
Meanwhile, the Board of Airline Representatives, a body of representatives of airlines operating from India has also expressed strong reservations over the government’s move, saying this will dampen growth in the air transport sector.
IATA has also written to finance minister P. Chidambaram and civil aviation minister Praful Patel requesting for withdrawal of the tax. According to the amended service tax rules, the service tax is to be levied by aircraft operators on passengers "embarking in India for international journey in any class other than economy class."
"Levying of service tax of 12 per cent will counter India’s efforts to increase tourist arrivals. People flying out of the country will now prefer buying tickets from abroad rather than from India," IATA country manager Robey Lal told this newspaper.
"The government proposes to levy this tax from May 1 this year. This is also giving rise to problems in operationalising the notification due to inadequate time available," Mr Lal emphasised.
Meanwhile, the Board of Airline Representatives, a body of representatives of airlines operating from India has also expressed strong reservations over the government’s move, saying this will dampen growth in the air transport sector.
IATA has also written to finance minister P. Chidambaram and civil aviation minister Praful Patel requesting for withdrawal of the tax. According to the amended service tax rules, the service tax is to be levied by aircraft operators on passengers "embarking in India for international journey in any class other than economy class."