Flying is going to high cost marginally more in the next financial year thanks to the hike in service tax rate from 12.36% to 14%. Airlines and travel agents say that the hike will be up to 2% of the ticket price. Which means, a Delhi-Mumbai ticket costing Rs 8,000 will cost about Rs 150 more. The impact on business and first class travel will be more due to high base fares which would lead to heftier hikes.
Yatra president Sharat Dhall said, "The increase in service tax will result in small increases in the prices of flights, hotels and holiday packages."Amber Dubey, partner and India head of aerospace and defence at KPMG, said: "The beleaguered aviation industry's long pending expectations of tax rebates on jet fuel, MRO, airports and general aviation have been ignored yet again.
Service Tax will enhance airfares.... India's troubled aviation sector will continue to struggle for another year." However, they said that the government's decision to increase visa on arrival facility to 150 countries will lead to an increase in number of flyers and benefit the industry. .
"The travel and tourism sector will take strong positives from the focus on development of key heritage sites and building of roads across the country as well as the move to extension of the visa on arrival scheme to over 150 countries, all of which should drive growth in the sector," Yatras's Dhall said
