When is a free ticket not free? When it’s in India.

The government of India has started bilking first class and business class passengers, INCLUDING those who upgrade or buy a ticket with miles, on all flights departing their country.

The finance ministry has now decided to levy 12.25% service tax from all passengers who occupy the Business and First Class seats in international airlines. And these would also include Economy Class ticket holders who are upgraded to the upper class free of charge. [...] Roughly, travellers need to pay a extra Rs 15,000-20,000 for travelling in Business Class, and around Rs 25,000-40,000 more for First Class to Europe. For US, such upgrades to Business Class would cost Rs 33,000-40,000, and Rs 60,000-80,000 for upgrades to First Class.

How do you tax a free ticket, you ask? By assuming the full fare were paid. Like charging rack rate taxes on a free hotel room (which is also done). Terrific.

That comes to anywhere between $300 and $1700 in taxes, payable at the check-in counter.

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