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Ashwini Phadnis
K.R. Srivats

New Delhi, March 17

International passengers using Hyderabad will have to pay Rs 1,100 or $28 as user development fee (UDF) when the new airport starts operations. This includes a service tax of 12.36 per cent that would go to the Centre. The Civil Aviation Ministry has pegged the UDF ceiling for international passengers departing from Hyderabad at Rs 1,000.

Sources told Business Line that the UDF will be collected by the airlines and given to Hyderabad International Airport Ltd (HIAL), the new company set up to run the greenfield airport, which in turn would pass on service tax component to the Government.

The Government had fixed the UDF charges at Rs 950 for international passengers departing from the new airport in Bangalore. The new Hyderabad airport is being developed by a consortium headed by the GMR group while a Siemens-led consortium is developing the Bangalore project.

The Civil Aviation Ministry is of the view that the UDF to be levied at Hyderabad and Bangalore, both of which are greenfield airports, should be inclusive of all taxes and the passengers should not be asked to pay a service tax in addition to the UDF limit set under the concession agreement.

The GMR decision to levy a service tax on UDF is in line with the view of the Finance Ministry, which feels that the service tax would be applicable on UDF.

Airport services were put under the service tax net from September 2004. So far, a majority of the service tax on airport services were being deposited with the revenue department by Airports Authority of India.

More Stories on : Infrastructure | Tourism | Andhra Pradesh

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