Air travel to be more expensive (Lead)

February 28th, 2011 - 3:25 pm ICT by IANS  

Pranab Mukherjee New Delhi, Feb 28 (IANS) Travelling by air is set to become costlier with Finance Minister Pranab Mukherjee increasing service tax on air travel in the union budget for 2011-12 presented in parliament Monday.”I propose to raise the service tax on air travel by Rs.50 in the case of domestic air travel and Rs.250 on international journeys by economy class,” Mukherjee said.

The minister also increased the service tax by 10 percent on business and first class travel only on domestic routes to bring the fares at par with international journeys in similar categories.

In July last year, the ministry had put a cap on service tax in case of domestic flights at 10 percent of the total value of the ticket, or Rs.100 per travel, whichever is less, and 10 percent of the gross value of the ticket, or Rs.500 on international travel by economy class.

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