Government to levy service tax on air tickets from 1 July: report

Air fares for domestic and international travel would rise by Rs100 and Rs500, respectively, beginning 1 July with the impost of a 10 per cent service tax on air tickets, reports said today.

The government, the reports said, has issued a notification to bring air travel into the service tax ambit. The union budget for 2010-11 had proposed a 10 per cent service tax on air travel.

The tax, proposed to be levied on all classes of travel, is expected to rake in around Rs1,600 crore a year for the government.