An Additional 10.3 Percent Will Be Tacked On To Each Ticket

A service tax of 10.3 per cent on the gross value of tickets for all classes on domestic flights and economy class on international flights will be levied on tickets sold, issued or re-issued, effective July 1, 2010, as per the directive of the Government of India, Ministry of Finance.

All domestic travellers would thus have to bear a service tax of 10.3% on the gross value of the ticket or Rs. 103 ($2.21), whichever is lower. For economy class tickets for international travel, a service tax of 10.3% on the gross value of the ticket or Rs. 515 ($5.05), whichever is less, will be levied. 
 
The service tax is only applicable on journeys originating in India. This service tax as collected will be credited to the Government of India Service Tax account. The gross value of the ticket for the calculation of the service tax will include the base price and fuel surcharge in addition to the congestion fee. Passenger service fee and airport charges (UDF/ADF) will not be covered for determining the gross value of the ticket.

The Indian international airline Jet Airways, and its all economy subsidiary JetLite, said in a news release they will collect this service tax under the tax code "JN". This is in addition to the already existing collection of service tax for international air travel for both Premiere and First Class passengers. 
 
Airline crew travelling on duty and United Nations staff are exempted from paying this service tax. This exemption will also include those embarking on a journey originating or terminating in an airport located in the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Bagdogra in West Bengal.

FMI: http://finmin.nic.in/, www.jetairways.com