INDIA BUSINESS WORLD - DECEMBER 16^th - DECEMBER 31^st - 2007

DGCA PULLS UP JET & KINGFISHER ON SURCHARGE

The directorate general of civil aviation (DGCA) has issued show cause notice against Kingfisher and Jet Airways for not furnishing details of the components charged as tax in their domestic tickets. The move comes after the civil aviation authority issued notices early this month to both the full-service carriers for allegedly misleading passengers by clubbing fuel surcharge and congestion charge with tax.

In the show cause notice to the airlines, DGCA asked them as to why action should not be initiated against them under paragraph 15 of Schedule XI to the Aircraft Rules, 1937, for not furnishing details of the charged tax components in their domestic tickets.

"We may temporarily suspend the airlines' operation for violating the conditions of permit to operate scheduled services," a senior official in the ministry of civil aviation said.

"None of the airlines have so far clarified on the tax component in the domestic air ticket. This is in violation of the conditions for operations annexed to the permit to operate scheduled air transport services," a ministry of civil aviation statement said.

Almost all airlines show fuel surcharge, which now stands at Rs 1,650, under the head of 'taxes and levies' though this amount is not deposited with the government. It's the same with the Rs 150 congestion surcharge. Clubbing of fuel surcharge and congestion charge with tax gives the impression that the amount goes to the government exchequer. In reality, while both congestion charge and fuel surcharge go to the airlines' kitty, a passenger service fee (PSF) of just Rs 225 goes to the government or airport operators. The PSF is used by the airport operator for maintaining the airport infrastructure and providing public amenities such as drinking water and security.