Service Tax Exemption for Regional Connectivity Scheme (RCS)
DDT 2918 29 08 2016 had reported about the Regional Connectivity Scheme (RCS) of the Ministry of Civil Aviation, is to facilitate / stimulate regional air connectivity by making it affordable. We reported,
Accordingly, Government has notified the concessional rate of 2% excise duty for Aviation Turbine Fuel drawn by operators or cargo operators from the Regional Connectivity Scheme (RCS) airports, till 25th day of August, 2019.
The Scheme proposes that Service Tax will be levied on 10% of the taxable value (abatement of 90%) of tickets for RCS Seats on an RCS Flight, without any input credit, for an initial period of 1 year from the date of notification of the Scheme by MoCA. Subsequently, this will be reviewed and notified accordingly. Service Tax will be payable by the passengers over and above the specified Airfare Cap.
CBEC is yet to notify the service tax concession.
CBEC has now notified this. 90% abatement is given to the value of service of Transport of passengers, with or without accompanied belongings, by air, embarking from or terminating in a Regional Connectivity Scheme Airport. This will be valid for a period of one year from the date of commencement of operations of the Regional Connectivity Scheme Airport as notified by the Ministry of Civil Aviation.
Notification No., Dated: August 30, 2016