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Congestion surcharge is no tax, says govt
December, 03rd 2007
Domestic airlines including Jet Airways, Kingfisher Airlines and Simplify Deccan may come under fire from the government for misleading passengers. The ministry of civil aviation is planning to slap a notice to air carriers for charging fuel-surcharge and congestion fee as tax.

We have verbally communicated our concern to the airlines but even then they have not paid any heed to it. We would soon write to them to stop this practice. Tax is a prerogative of the government and hence they (airlines) should not jump onto it. Transparency must be maintained while dealing with consumers, a top government official said.

Airlines mention surcharge and congestion fee under the head of tax in their tickets to passengers. For example, if they charge an airfare of Rs 5,200 for Delhi-Mumbai they mention Rs 3,475 as airfare and Rs 1,725 as tax in the tickets even though the actual tax component in the airfare is just Rs 225 per passenger.

The other charges levied as tax are a fuel surcharge of Rs 1,350 and a congestion fee of Rs 150. Both congestion fee and fuel surcharge go to airlines. If only Rs 225 goes to the government or the airport operator, why should airlines charge other fees which comes to them as tax, the official added.

The tax levied on passengers goes to airport operator towards airport and terminal building maintenance, providing passenger amenities and security among others. While, security forces are deployed at airports by the government, the airport operator pays them their salaries.

While airlines maintain that surcharge is different from tax, they still print it as tax on tickets. In the past, airlines have hiked airfare indirectly by increasing fuel surcharge. Airlines dont include fuel surcharge in the airfare to show low fares.
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