Federal excise duty (FED) rates have changed for first class, business class, and club class airline tickets, according to the government. On international flights, the FED rates will be determined on the destinations.
On Monday, the Finance Supplemental Bill 2023 was introduced with these revisions. After the Finance (Supplementary) Law 2023 takes effect, club, business, and first-class airline tickets will be subject to the tax at the revised FED rates.
The FED rates will be divided into three slabs. The FED rate for tickets to IATA Traffic Conference Area-1 will be Rs. 250,000 under the first slab (North, Central, South America and environs). For IATA Traffic Conference Area-2 (the Middle East and Africa) tickets, the second slab will be Rs. 75,000, and for IATA Traffic Conference Area-2 tickets, Rs (Europe). For tickets to IATA Traffic Conference Area-3, the third slab will cost Rs. 150,000. (Far East, Australia, New Zealand and Pacific Islands).
The Senate made recommendations to the National Assembly for changes in the Finance (Supplementary) Bill 2023. They suggested fixing a definite amount of tax on international air travel for each destination instead of imposing a 20 percent tax.
Previously, the government had proposed to increase FED on air tickets for premium classes through the Finance Supplementary Bill 2023. The FED was supposed to be 20 percent of the gross amount of tickets or Rs. 50,000 per ticket, whichever is higher.