Should we charge Service Tax on Basic Air Fare or Total Air
This query is : Resolved
19 April 2009
For last couple of years, we have been charging Service Tax on Total Air Fare (of Domestic/ International Flights).
Now we have come to know that Service Tax is to be charged only on the BASIC AIR FARE. After checking with my associate Agents I realised that they are changing Service Tax/ Cess on Basic Air Fare (as per Service Tax Rules).
Kindly advise if I should also charge Service Tax on Basic Air Fare.
If Yes, would I be questioned by Service Tax Deptt. as to why we have changed our practice and started charging on Basic Air Fare.
Kindly Advise.
Regards,
Anurag
Now we have come to know that Service Tax is to be charged only on the BASIC AIR FARE. After checking with my associate Agents I realised that they are changing Service Tax/ Cess on Basic Air Fare (as per Service Tax Rules).
Kindly advise if I should also charge Service Tax on Basic Air Fare.
If Yes, would I be questioned by Service Tax Deptt. as to why we have changed our practice and started charging on Basic Air Fare.
Kindly Advise.
Regards,
Anurag
19 April 2009
Why not check the provisions wherein Under sub-rule (7) of rule 6 as amended by Not. No. 17/2006 ST an air travel agent is can discharge Service Tax at the rate of 0.6% of the basic fare in case of domestic booking and @1.2% of the basic fare in the case of international tickets towards discharge of his Service Tax liability instead of paying tax the tax at the prevailing rates.
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