New Delhi, February 26: Air travel on all classes in both domestic and international sectors is likely to become costlier with the government expanding the scope of air transport services to attract service tax.
“The scope of air passenger transport service is being expanded to include domestic journeys and international journeys in any class,” said the memorandum explaining the provisions of the 2010-11 Finance Bill, presented by Finance Minister Pranab Mukherjee in Parliament today.
So far, service tax was imposed only on international travel on First and Business classes.
The government, however, has proposed to exclude from the taxable value the statutory taxes charged by foreign governments, it said, indicating airport taxes charged at foreign destinations.
The definition of ‘airport services’ was also being amended to include all services provided within the airport premises.
—Agencies