Airlines revise service tax on tickets

Service tax will be levied at 7.41% of first and business class fares and 4.94% of economy class fares

Airlines have began charging the revised service tax on tickets following the hike in rates announced in the union budget last month.

Airlines have informed agents of the new service tax slabs which will be applicable for all travel post April 1.

Service tax will be levied at 7.41% of first and business class fares and 4.94% of the economy class fares.

In the union budget  finance minister Arun Jaitely announced a reduction in abatement in service tax on business class and first class fares from 60% to 40%.

Consequently, service tax would be payable on 60% of the value of fare for business class. This is in  addition to increase in tax rate from 12.36% to 14%.