IATA opposes new taxes on air travel, TAAI disappointed with the Union Budget

Additional taxes have been proposed on air travel in India, South Africa and Iceland

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As Indian carriers protest the proposed hike in service tax on air travel, global airlines body IATA has said such taxes would compromise the industry's ability to maintain margins in the wake of rising fuel prices.

Rajji Rai, President, Travel Agents Association of India (TAAI) too has expressed his disappointment over the Union Budget. In a statement issued by TAAI, he said, “The reaction to the Union Budget 2011-12 has been one of disappointment.  TAAI  is  of the   opinion  that the government is neglecting tourism and hospitality industries, amongst  the largest generator of employment in the country. There are no incentives or sops from the  Government for our trade. The current levels of taxation should not have been touched. Instead, the government has increased Service Tax on tickets and hotel rooms. This shows that  the Government has taken no interest in Tourism and Civil Aviation  in this Union Budget and is in fact totally insensitive about this industry in India.  Air travellers in India are already paying  Service Tax, airport tax etc  and this expense is really bleeding the passengers. It is learnt that the  Air  Passengers Association of India (APAI) has decided to take up the matter with the International Civil Aviation Organisation (ICAO) as well as the civil aviation ministry.  It is  a well  known fact that air travel is no longer restricted to the "Rich and the Famous" but has become the  mode of transport for the  middle income  common man.  Thus they are all going to be affected.  Is there  a service tax on  other travel modes   such as rail, road and water ? The  answer is a NO  then what is the need to tax air travel? It is really sad that our industry has  once again been sidelined and not given the attention it deserves”.

In the last few weeks, additional taxes have been proposed on air travel in India, South Africa and Iceland, while new and increased taxes of 3-5 per cent of ticket prices were imposed in the UK, Germany and Austria last year, the International Air Transport Association (IATA) has said.

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