The hefty 10.3% service tax you are being made to pay to fly abroad for the past few years is violation of rules of International Civil Aviation Organisation (ICAO), to which India is a signatory.
To stop the fleecing, Air Passengers Association of India (APAI) has decided to take up the matter with ICAO as well as the civil aviation ministry.
India started levying the tax on international business or first class air travel in 2006.
“ICAO resolutions state that international air transport should be exempt from taxes,” Albert Tjoeng, spokesperson for International Air Transport Association (IATA), said, adding, “India’s service tax on tickets for international travel contravenes ICAO resolutions. It is ironic that despite being a member of ICAO, India should contravene its resolutions.”
ICAO is a United Nations agency that codifies principles and techniques of international air navigation and fosters planning and development of international air transport to ensure safe and orderly growth, while IATA is a trade body of international airlines.
“India is a signatory to ICAO, whose rules do not permit levy of service tax,” APAI president Sudhakara Reddy said.
What has pained APAI is the fact that in 2010, even the economy class — both domestic (Rs100) and international (Rs500) — was brought under the tax ambit.
“Now, they have added Rs50 to domestic and Rs250 to international air tickets. Earlier, it was a small amount, so we said nothing. But they keep on burdening passengers. We are seeking legal opinion on this and will take up the matter with ICAO as well as the aviation ministry,” Reddy said.
IATA says any further increase in service tax in 2011 might prove detrimental to the aviation industry. “It [India] is not following rules it helped create. The increase in service tax will place a higher cost burden on the Indian aviation industry. It [the tax] should be removed entirely.”
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