All about Inland Air Travel Tax  

Passenger not to be permitted to board aircraft without payment of inland air travel tax.

Penalty for failure to pay Inland Air Travel Tax to credit of Central Government

This Chapter extends to the whole of India.

It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

In this chapter, unless the context otherwise requires,-

“aerodrome” means any aerodrome as defined in clause (2) of section 2 of the Aircraft Act, 1934, which is situated in India;

“aircraft” means any aircraft as defined in clause (1) of section 2 of the Aircraft Act, 1934, which is used (whether exclusively or not) for the carriage of passengers;

“carrier” means the person or authority undertaking the carriage of a passenger on an inland journey and includes any agent, representative or other person acting on behalf of such person or authority;

“fare” means the total amount of all charges of whatever nature (including charges, if any, for provision of food or accommodation) payable to the carrier  by or on behalf of a passenger in respect of his inland journey,

[ Note:  *   definition of the term “ fare”  was substituted vide section 71 of Finance Act, 1990 ( 12 of 1990)]

“inland journey”,  in relation to a passenger,  means his journey from any aerodrome on board any aircraft to another aerodrome;

“passenger” means any person boarding, at any aerodrome, an aircraft for performing an inland journey, but does not include,-

a person who performs an inland journey on a through international ticket and which precedes, or forms part of a series of journeys preceding, or follows, or forms part of a series of journeys following, a journey to or from a place outside India on the same ticket; or

a person employed or engaged in any capacity on board the aircraft on the business thereof.

With effect from the date of commencement of this Chapter, there shall be levied on all passengers embarking on every inland journey, a tax (hereafter in this Chapter referred to as the inland air travel tax) at the rate of  **[ fifteen per cent. ] of the fare paid by such passengers for every such journey.

Explanation.- When a passenger performs an inland journey at a concessional rate or without being charged any fare, the fare ordinarily payable for the journey shall, for the purposes of this section, be deemed to have been paid by such passenger.

In accordance with the rules made under this Chapter, the inland air travel tax shall be collected by the officers of customs appointed under the Customs Act, 1962, or the Central Excise Officers appointed under the Central Excises and Salt Act, 1944, or such officers of the Central Government or the State Government or the International Airports Authority of India constituted under the International Airports Authority Act, 1971, or the National Airports Authority constituted under the National Airports Authority Act, 1985, or such carriers, as may be authorised in this behalf by the Central Government by notification in the Official Gazette and paid to the credit of the Central Government.

[ Note:  ** amendments were made vide section 71 of Finance Act, 1990 ( 12 of 1990) – the rate of tax was increased from 10% to 15% and  the words “ where the fare for such journey is paid in Indian Currency” were omitted]

In computing the inland air travel tax, wherever necessary, the tax leviable shall be rounded off to the nearest rupee, fifty paise and over being counted as one rupee and less than fifty paise being disregarded.

Where any carrier or other person fails to pay the inland air travel tax to the credit of the Central Government under sub-section (2) of section (2) of section 42, in accordance with the rules made under this Chapter, he shall pay an interest on the amount of tax not so paid for the entire period for which payment of such tax has been delayed, at such rate, not below twenty per cent, and not exceeding thirty per cent. per annum, as the Central Government, by notification in the Official Gazette, specify in this behalf.

Where, on or before the date of commencement of section 98 of the Finance Act, 1994, the inland air travel tax had not been paid by any carrier or other person to the credit of the Central Government, in accordance with the rules made under this Chapter, the carrier or other person shall pay the amount of such tax within a period of thirty days of such commencement, failing which he shall be liable to pay the interest in accordance with the provisions of subsection (1).]***

[ Note: *** inserted vide section 98 of the Finance Act, 1994 (32 of 1994) ] 

Notwithstanding anything contained in this Chapter, the Central Government may, by notification in the Official Gazette, and subject to such conditions and limitations as may be specified therein, exempt wholly or to such extent as may be specified in the notification, any class or classes of passengers or any category or categories of passengers under any such class from the payment of inland air travel tax if that Government is satisfied that it is necessary or expedient so to do, having regard to the place of destination, purposes of the journey or any other special circumstances.

Passenger not to be permitted to board aircraft without payment of Inland Air Travel Tax

No carrier or other person in charge of an aircraft shall allow any passenger to board the aircraft unless such passenger has paid the inland air travel tax.

Every passenger who embarks or attempts to embarks on an inland journey without paying the inland air travel tax shall, in addition to his liability to pay the inland air travel tax, be liable to a penalty not exceeding twice the amount of the inland air travel tax.

Every carrier or other person in charge of an aircraft, who, in contravention of the provisions of section 45, allows any passenger or passengers to board the aircraft, shall be liable to a penalty not exceeding three times the amount or the aggregate amount of the inland air travel tax payable by the passenger or passengers so allowed to board the aircraft.

Every carrier or other person who fails to pay the inland air travel tax to the credit of the Central Government under sub-section (2) of section 42 shall, in addition to the payment of such tax and the interest leviable thereon, be liable to pay penalty which shall not be less than one-fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government.

Any rule made under this Chapter may provide that in case of breach thereof by the carrier or other person, he shall be liable to a penalty which shall not be less than five hundred rupees but which may extend to fifty thousand rupees, and where the breach is a continuing one, with further penalty which may extend to five hundred rupees for every day after the first during which such breach continues.

Any penalty under this section may be adjudged, collected and paid to the credit of the Central Government by such authority and in such manner as may be specified in the rules made under this Chapter:

Provided that no order for imposing a penalty shall be passed by such authority unless the carrier or other person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority. ]****

[ Note: * * * *   Inserted vide section 98 of the Finance Act, 1994 ( 32 of 1994)]

Where the inland air travel tax or interest or penalty is not paid by a carrier or other person, as required under the provisions of sub-section (2) of section 42, section 43A or section 46, the authority specified in the rules (hereinafter referred to as the authority), may, after the tax, interest or penalty has been determined under the rules proceed to recover the amount of such tax, interest or penalty by one or more of the modes specified in sub-section (2), sub-section (3) or sub-section(4).

The authority may require any person from whom any amount is due to the carrier or other person, to deduct the tax, interest or penalty so determined from the said amount and such person shall comply with any requisition by the authority and shall pay the amount so deducted to the credit of the central Government:

Provided that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908.

The authority may prepare a certificate signed by it specifying the amount due and send it to the Collector of the district in which carrier or other person owns property or resides or carries on business and the said Collector, on receipt of such certificate, shall proceed to recover from the said carrier or other person, the amount specified thereunder as if it were an arrear of land revenue.

The authority may distrain or arrest any aircraft and any other property belonging to, or under the control of, the carrier or other person, as the case may be, and detain the same until the tax, interest or penalty  so determined is paid; and in case any part of the tax, interest or penalty or of the cost of the distress or arrest or of the keeping of the aircraft or other property detrained or arrested, remains unpaid for the space of thirty days next after any such distress or arrest, may cause the said aircraft or other property to be sold and with the proceeds of such sale may satisfy the tax, interest or penalty and the costs including the cost of sale remaining unpaid, and shall render the surplus, if any, to the carrier or other person. ] * * * * *

[ Note: ***** inserted vide section 98 of the Finance Act, 1994 ( 32 of 1994)]

If any carrier fails to pay to the credit of the Central Government, the inland air travel tax collected by him as required under the provisions of section 42, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.] $

Where any offence under section 46B has been committed by a company, every person who, at the time when offence was committed, was directly in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in the said section, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

Notwithstanding anything contained in sub-section (1), where an offence under section 46B has been committed by a company and it is proved that the offence has been committed with the consent and connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

‘company’ means that any body corporate and includes a firm or other association of individuals; and

No suit or other legal proceeding shall lie against the Central Government and no suit, prosecution or other legal proceeding shall lie against any officer of the Central Government or the State Government or the International Airports Authority of India or the National Airports Authority referred to in sub-section (2) of section 42 for anything in good faith done or intended to be done in pursuance of this Chapter or the rules made thereunder.

The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Chapter.

In particular, and without prejudice to the generality of the foregoing power, such rules may provide for-

the collection of the inland air travel tax including the charges for collection payable to any State Government or the International Airports Authority of India or the National Airports Authority referred to in sub-section (2) of section 42, or any carrier, the authorities by whom adjudication of penalties or other functions under this Chapter shall be discharged, the manner in which the inland air travel tax, penalties or other sums due under this Chapter shall be payable, the manner in which the inland air travel tax, penalties or other sums shall be collected and paid to the credit of the Central Government and the procedure for claiming refund of any amount paid under this Chapter;

the powers of officers authorised under sub-section (2) of section 42 to enter, inspect and search any aircraft for the purpose of carrying on any duty imposed on such officer by or under this Chapter:

Provided that the provisions of the Code of Criminal Procedure, 1973, relating to searches, shall, so far as they are applicable, apply in relation to searches under rules made under this clause;

appeals against orders made under this Chapter, the manner in which and the time within which such appeals may be preferred and the fees payable therefor;

the returns and other particulars and information which may be required to be furnished for the purposes of this Chapter, the persons or authorities by or to whom or which, and the intervals at which such returns, particulars and information shall be furnished;

any other matter which is to be, or may be, provided for by rules under this Chapter.

Every rule made under this Chapter and every notification issued under section 44 shall be laid, as soon as may be after it is made or issued, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule should not be made or the notification should not be issued, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification.

Where any carrier or other person fails to pay the inland air travel tax to the credit of the Central Government under sub-section (2) of section (2) of section 42, in accordance with the rules made under this Chapter, he shall pay an interest on the amount of tax not so paid for the entire period for which payment of such tax has been delayed, at such rate, not below twenty per cent, and not exceeding thirty percent per annum, as the Central Government, by notification in the Official Gazette, specify in this behalf.  

Where, on or before the date of commencement of section 98 of the Finance Act, 1994, the inland air travel tax had not been paid by any carrier or other person to the credit of the Central Government, in accordance with the rules made under this Chapter, the carrier or other person shall pay the amount of such tax within a period of thirty days of such commencement, failing which he shall be liable to pay the interest in accordance with the provisions of subsection (1) “;  

Every carrier or other person who fails to pay the inland air travel tax to the credit of the Central Government under sub-section (2) of section 42 shall, in addition to the payment of such tax and the interest leviable thereon, be liable to pay penalty which shall not be less than one-fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government.  

Any rule made under this Chapter may provide that in case of breach thereof by the carrier or other person, he shall be liable to a penalty which shall not be less than five hundred rupees but which may extend to fifty thousand rupees and where the breach is a continuing one, with further penalty which may extend to five hundred rupees for every day after the first during which such breach continues.  

Any penalty under this section may be adjudged, collected and paid to the credit of the Central Government by such authority and in such manner as may be specified in the rules made under this Chapter:  

Provided that no order for imposing a penalty shall be passed by such authority unless the carrier or other person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.”;  

after section 46, the following section shall be inserted, namely:-  

Where the inland air travel tax or interest or penalty is not paid by a carrier or other person, as required under the provisions of sub-section (2) of section 42, section 43A or section 46, the authority specified in the rules (hereinafter referred to as the authority), may, after the tax, interest or penalty has been determined under the rules proceed to recover the amount of such tax, interest or penalty by one or more of the modes specified in sub-section (2), sub-section (3) or sub-section(4).  

The authority may require any person from whom any amount is due to the carrier or other person, to deduct the tax, interest or penalty so determined from the said amount and such person shall comply with any requisition by the authority and shall pay the amount so deducted to the credit of the central Government:  

Provided that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1908.  

The authority may prepare a certificate signed by it specifying the amount due and send it to the Collector of the district in which carrier or other person owns property or resides or carries on business and the said Collector, on receipt of such certificate, shall proceed to recover from the said carrier or other person, the amount specified thereunder as if it were an arrear of land revenue. 

The authority may distrain or arrest any aircraft and any other property belonging to, or under the control of, the carrier or other person, as the case may be, and detain the same until the tax, interest or penalty  so determined is paid; and in case any part of the tax, interest or penalty or of the cost of the distress or arrest or of the keeping of the aircraft or other property detrained or arrested, remains unpaid for the space of thirty days next after any such distress or arrest, may cause the said aircraft or other property to be sold and with the proceeds of such sale may satisfy the tax, interest or penalty and the costs including the cost of sale remaining unpaid, and shall render the surplus, if any, to the carrier or other person.”..

If any carrier fails to pay to the credit of the Central Government, the inland air travel tax collected by him as required under the provisions of section 42, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to seven years and with fine.  

Where any offence under section 46B has been committed by a company, every person who, at the time when offence was committed, was directly in charge of,  and was responsible to, the company for the conduct of the business of the company, as well as the company,  shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.  

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in the said section, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.  

Notwithstanding anything contained in sub-section (1), where an offence under section 46B has been committed by a company and it is proved that the offence has been committed with the consent and connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.  

‘company’ means that any body corporate and includes a firm or other association of individuals; and