First class and business class airfares have gone up by 2.5 per cent following change in service tax structure as announced in the Union Budget 2015-16. There has been no additional service tax burden on economy class fares, according to travel industry officials.
In the budget, the Finance Minister announced a reduction in abatement in service tax on first and business class from 60 per cent to 40 per cent which means service tax would be payable on 60 per cent of the cost of the fare.
Airlines have started charging more for tickets issued on or after March 16, 2015, and for travel on or after April 1, 2015.
Neelu Singh, Chief Operating Officer, Ezeego1.com said “A hike in flight tickets was expected post the budget announcement. Business and First class tickets are likely to get dearer by a minimum of Rs.3,000 to Rs.5,000. But the good news is that there has been no change in economy class rates. The hike may prompt some corporate travellers to switch over to economy class.”
