« Top Headlines » Open DEMAT Account in 24 hrs  Why we need a new Income-Tax Act  ITR 2024: No tax refund yet? Here's why it's delayed and how to check  ITR Filing: Income Tax Refund Not Received Yet? Here's What to Do Now  ITR Refunds for FY2023-24 (AY2024-25): Who will receive tax refunds quicker, filers of ITR-1, ITR-2 or ITR-3?  Penalties for Non-Adherence of MCA Notification on Audit Trail (Edit Log) w.e.f 1st April 2023  Income Tax: What is Section 148A notice and what are the new changes brought under Budget 2024?  GST on health and life insurance: How much do tax rates impact your premiums? check here  Income Tax Refund Delays Here s why your refunds are stuck and how long Income Tax Dept can legally take  ITR filing: How can taxpayers check their income tax refund status online? A step-by-step guide  ITR filing 2024: Waiting for your income tax refund? Here are 3 tax refund rules you should know  How to check income tax refund status online using PAN card? «  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.