The new service tax on air travel that came into effect from Thursday, amounts to dual taxation for the same journey if you buy air tickets from a travel agent.
Passengers buying air tickets from travel agents already pay 10.33 per cent tax on the base fare as service tax. Now, with the new tax, for the same journey passenger will have to pay an extra Rs 103 for a domestic flight and Rs 515 for an international flight. The new tax will be collected by the airline, which issues the ticket.
Fearing loss of business the Travel Agents Association of India (TAAI) comprising 2800 travel agents across the country, is opposing the new service tax. “Travel agents are likely to meet the finance minister on the issue next week,” said Rajji Rai, president, TAAI.
“The new tax structure will have an adverse effect on business during the Commonwealth Games later this year,” Rai said.