Pay service tax at airport for tickets bought in June

If you have booked your air ticket in June then be prepared to shell out a service tax of Rs 103 on your domestic ticket and Rs 515 on your international ticket at the time of check in. The service tax on economy class travel came into effect from July 1. However, confusion prevailed among the airlines over its collection. But now, the government has asked the airlines to collect service tax on all the tickets sold in the month of June as well. Air India has issued a circular to all its travel agents to inform the passengers about the new service tax. While business and first class travel on international sectors was already under the ambit of service tax, Finance Minister Pranab Mukherjee in his budget announced a 10.3 per cent service tax on economy class as well. International tickets are charged a minimum of Rs 515. The tax is collected on each trip and a return journey attracts double the amount. An Air India official said that they were first informed that the tax had to be paid on all journeys on or after July 1, irrespective of when the ticket was bought. Later, the government issued a clarification stating that service tax should be levied only on tickets purchased on or after July 1. “Now we have received fresh instructions to collect service tax on bookings made from June 1. So now passengers can either pay the travel agent the tax amount in advance or pay it at the time of check in,’’ the AI official added. Despite repeated attempts, Jet Airways and Kingfisher Airlines did not respond to media query on the issue. Sources in Indigo Airlines said they had not received instructions to collect tax on the tickets sold in the month of June.

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The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).