« Top Headlines » Open DEMAT Account in 24 hrs  ITR Filing: 6 Ways to Get Exemption on Income Tax  Income Tax Return Filing: 10 Mistakes To Avoid When Filing ITR For AY 2024-25  Old vs New Tax Regime: Who should move to the New Tax Regime from the old one?  Income Tax Calculator FY 2023-24: How To Know Your Tax Liability Online On IT Dept's Portal?  BackBack Income Tax Act amendment on cards on tax treatment of MSME dues  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing. Check details here  Income tax slabs FY 2024-25: Experts share these 8 benefits for taxpayers in new income tax regime  How To File ITR Online - Step by Step Guide to Efile Income Tax Return, FY 2023-24 (AY 2024-25)  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals «  Exporters get self-declaration power... No additional tax exemptions for petrochem hubs... » I-T to trap business class travellers October, 23rd 2006 There is no respite from service tax if you travel business class on your overseas journey. The revenue department has set out stiff terms for calculating service tax on club class fares. The 12.24% levy will apply even if the ticket is issued outside the country. Even the domestic sector linked to global travel would be subject to the tax, according to a circular issued by the department. Airlines, which had protested the imposition of the levy on all business class travel to international destinations, is upset at the move and is planning to petition the government once again. The location from which a ticket is issued is of no consequence, says the circular. If a ticket is issued outside India for an international journey commencing from India, say on the Delhi-London segment, service tax would be payable. Even if your uncle in the UK buys your ticket for an India-London-India journey, the revenue department wants its pound of tax. Airlines have been arguing that it is not fair to demand tax for a service bought outside India. Round-trip air tickets will attract service tax on the entire value of the ticket, says the circular. For example, if you travel India-Dubai-London-New York, the service tax will be applicable for the full value of the ticket. Airlines had demanded that service tax should be imposed only on the Delhi-Dubai leg, leaving the rest untouched. The Central Board of Excise & Customs has clarified that service tax would be levied on the total value of the ticket. The taxable value of service tax on global travel would also include the local sector. If you travel Delhi-Mumbai-London, for example, the tax would cover even the cost of your Delhi-Mumbai flight. Airlines had argued that domestic connections linked to an international flight should not be brought under the service tax net. The only relief is in the case of journey commencing from an airport outside India but includes a sector within the country. If a passenger travels Sydney-Mumbai-Dubai-Singapore-Sydney, no tax would be demanded. The clarifications from the revenue department have come in response to demands from the Board of Airline Representative (BAR) which represents both domestic as well as international airlines. Services provided by the aircraft operator to passenger embarking in India for international journey by any class, other than economy class, came under the service tax net from May 1. BAR had taken up the matter with the revenue department after some airlines were issued notices by the service tax department in Mumbai.