TAAI calls for abolition of double taxation system

Mumbai, Feb 11 (UNI) Travel Agents Association of India (TAAI), has expressed hope that Union Finance Minister P Chidambaram would look into their demand of abolition of double taxation while preparing the Union Budget for the new fiscal.

''We feel that the double taxation system should be done away with, as it is totally redundant. I hope that the Finance Minister will look into the issue in the coming budget,'' TAAI President C Venkateshwara Prasad told UNI.

Mr Prasad said that the travel agents body Association has already filed a writ on the abolition of double taxation in the AP High Court last week, seeking the court's directive to the Union Government in this regard.

An air passenger in the country has to pay double service tax when he books his ticket through a travel agent. In addition to the service tax of 12.36 per cent that is levied on airfare, a passenger has to shell out another 0.61 per cent service tax on domestic airfare.

Likewise, passengers have to pay 1.23 per cent service tax on all international air tickets that are booked through travel agents in addition to the 12.36 per cent service tax already paid on the airfare. On the other hand, a service tax of 4.9 per cent is levied on holiday packages, in addition to a service tax of 12.36 per cent paid to the service provider.

Mr Prasad said that the Association was also looking for some major concessions in the budget for the in-bound operators, more especially when the dollar had lost its value and Indian products were getting costlier.

''It is a presumption then that the tour operators in the country work on a 25 per cent margin,'' he said, adding, ''In fact, multiple taxes are eating into business.'' The TAAI President also demanded that along with multiple taxes, the service tax on business and first class should also go as there was no such taxing system anywhere in the world.

''Travel is no more a luxury product, in the changing world it has become a way of life. In this scenario, a traveller should be burdened with minimum taxes,'' he said.

Mr Prasad also supported the demands from various quarters that the Government should scrap the fringe benefit tax.

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