Tax component: Kingfisher, Jet issued show cause notices
December, 21st 2007
Kingfisher Airlines and Jet Airways run the risk of having their permit cancelled or suspended for a certain period of time if the Director-General of Civil Aviation (DGCA) is not satisfied by the explanation provided by January 4 next year in response to a show cause notice issued late on Thursday.
In the show cause notices issued to the Chief Executive Officer of the two airlines, the DGCA has said both had not responded to two letters sent out earlier seeking clarifications from them by December 19.
Although you were directed to send the reply latest by December 19, this office has not received any reply. This is in violation of the conditions for operations annexed to the Permit to operate Scheduled Air Transport Services. In view of the above, you are advised to show cause as to why action should not be initiated against you, the notice adds.
The show cause notice was issued after the Government sought details from both the airlines on what they charge as the tax component of the ticket and whether this were being deposited with the Government.
The DGCA in an earlier communication had pointed out that the airline web sites show two components of the airfare basic fare and taxes. Further it was pointed out that it has not been clarified whether components such as passenger service fee and fuel surcharge were included in the basic fare or had been clubbed under taxes.
The DGCA pointed out that a tax was defined to be a fee levied by the Government on a product, income or activity and this was to be deposited with the Government and a record be maintained.