Dubbing the charging of service tax on air tickets by India as ‘illegal’, the International Air Transport Association (IATA) Chief Giovanni Bisignani told a conference in New Delhi on 23rd Sep’2010 that the service tax of 10.3%, slapped on the international airline tickets four years ago and on the domestic air tickets from this year, was illegal under International Civil Aviation Organization (ICAO) rules. It is to be noted that while ICAO is a UN agency that sets the rules for global aviation, IATA represents world’s top airlines.
Addressing the conference organized by Chamber of Indian Industries (CII), Bisignani painted a picture of a divided Indian Government on the issue of slapping service tax by saying that the Finance ministry has charged the tax despite reservation about the move by Praful Patel headed Aviation ministry.
Both the domestic and international airlines have been protesting against the tax saying that the tax jeopardized air travel passenger traffic apart from violating ICAO norms. Bisignani was also critical of Indian government for not following the rules that it helped to create.