International return air tickets may cost more
DEEPSHIKHA SIKARWAR
 
TIMES NEWS NETWORK [ WEDNESDAY, OCTOBER 18, 2006 04:10:36 PM]

NEW DELHI: International return air tickets may cost more. Round-trip air tickets will attract service tax. The central board of excise and customs has clarified that service tax would be levied on the total value of ticket.

As per the circular, air ticket for a journey commencing from an In-dian airport will attract service tax on its full value. A stopover or transfer in between a journey were of no consequence where levy of service tax was concerned.

For example if ticket is from Mumbai-Dubai-London-New York, serv-ice tax was leviable on full value as it represented single composite service. In the same way, if the international travel also includes do-mestic sector say Delhi-Mumbai-London, service tax would be levied on total value of ticket.

Also, if a ticket is issued outside India for an international journey commencing from India say Delhi-London, service tax would be pay-able by the service provider for the taxable service provided and place of purchase or issue of ticket was of no consequence to determine the levy of service tax.

However, service tax would not be levied in case of journey commenc-ing from an airport outside India but including a sector wherein pas-senger disembarks and embarks at an Indian airport as part of inter-national journey, say Sydney-Mumbai-Dubai-Singapore-Sydney.

The clarification some in wake of the Board of Airline Representative (BAR) in the country raising various issues regarding the levy of serv-ice tax. Services provided by the aircraft operator to passenger embark-ing in India for international journey by any class, other than econ-omy class came under service tax net from May 1. The BAR had taken up the matter with revenue department after some airlines were is-sued notices by service department in Mumbai.

Economic Times

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