New Delhi/Hyderabad: Civil Aviation Minister Praful Patel today sought complete rollback of 10 per cent service tax imposed on domestic air travel, while the CBEC said the rate should not be too heavy on airlines.
"We will request for a complete rollback of service tax," Patel told reporters in
The Civil Aviation Ministry would take up the issue with the Finance Ministry, Patel said, expressing the hope that the latter would respond favourably to the Civil Aviation Ministry's representation.
The Chairman of Central Board of Excise and Customs (CBEC), V Sridhar, at a post-Budget seminar in New Delhi said that the government could consider a lower service tax rate on international and domestic air travel and is in talks with the airlines on the issue.
"We are having a dialogue (on service tax issue) with all the carriers and other stakeholders ... we should arrive at a rate which is not too excessive and should not pass undue burden (on passenger)," Sridhar said.
Finance Minister Pranab Mukherjee in his Budget had proposed a service tax of 10 per cent on both domestic and international travel.
"The service tax is charged at a flat rate of 10 percent ... whether that is too heavy and whether we need to peg the rate at some different level (is to be considered)," CBEC Member Y G Parande later told reporters in New Delhi when asked about the fallout of the tax on air travel cost.
Parande further clarified that service tax would be levied on base fare.
Mukherjee, while trying to garner more revenue from service tax, also expanded the scope of 'airport services' tax by including facilities provided within the airport premises.
On national air-carrier Air
The airline was also planning to return some of its leased aircraft, he said. "Air
PTI
