Air tickets to become little dearer in India

Buying an air ticket could cost a bit more from next fiscal with Jaitley on Saturday proposing a two per cent increase in service tax.

If this proposal may not enthuse passengers, there is more bad news for the Civil Aviation Ministry as he announced a more than 50 per cent cut in budget allocation.

According to the Finance Bill tabled in Parliament, Jaitley has increased the service tax rate from existing 12.36 per cent to 14 per cent. Travel portals said this would result in a marginal increase in air tickets. For a Rs 9,000 ticket, the increase could be in the range of Rs 150-200.

“The increase in service tax will result in small increases in the prices of flights, hotels and holiday packages,” Sharat Dhall, president of travel portal Yatra.com, said. The exemption given to construction, erection, commissioning and installation of original works pertaining to airport or port is being withdrawn," the Finance Bill said.