Services at airports likely to attract tax

The Central Board of Excise and Customs (CBEC) has asked its field formations to ensure that all airports, including private ones and those maintained by defence forces, collect tax on services extended within the airport premises.

The instructions follow representations by Goa, Cochin and Pune airports which are not managed by the Airports Authority of India.

"Since rules state that service tax has to be collected by the AAI or any person authorised on its behalf, the department has received representations from private airports which are not managed by it," an official said.

Officials said instructions had now been issued to all field formations stating that the tax on services provided within an airport would have to be collected by the airport authority concerned.

The government has, during the first four months of the current fiscal, collected Rs 4,890 crore as service tax, against Rs 3,415 crore up to July 2004, registering an increase of 43 per cent. There are 81 services which are taxed by the government.

Several services related to airports, including courier services, insurance, air travel agent service come under the ambit of the service tax.