Service Tax imposed on domestic and international air travel: Civil Aviation Minister Praful Patel

According to a PIB release, Civil Aviation Minister Praful Patel recently informed the Lok Sabha that Service Tax on air travel has been imposed on international air travel for a passenger embarking in India and travelling in higher (other than economy) classes with effect from May 1, 2006. Vide the Finance Act, 2010; Service Tax on air travel was expanded to cover international travel (economy class) and domestic travel. The rates of Service Tax on air travel are as under:

• Service Tax on domestic passenger transport services at the rate of ten per cent of the gross value or Rs 100 per trip, whichever is lower is levied. The journey to/from airports situated in the states of Assam, Meghalaya, Manipur, Mizoram, Tripura, Nagaland, Arunachal Pradesh, Sikkim and Bagdogra in West Bengal are exempted.
• Air Transport Service to international passenger travelling in Economy Class and embarking in India at the rate of ten per cent of the gross value or Rs 500 per trip, whichever is lower.