SME Times News Bureau | 02 Aug, 2017
Under the Goods and Services Tax (GST) regime tax rate on air passenger tickets for economy class has been reduced from 6 percent to 5 percent, said Minister of State for Civil Aviation Jayant Sinha on Monday.
In a written reply to a question in the Rajya Sabha, Sinha said the applicable tax rate on passenger tickets for economy class has been reduced from 6 percent to 5 percent (non-creditable for goods).
He added that the tax rate for business and first class has been increased from 9% to 12% (with input tax creditable for both goods and services procured by airlines).
With regard to the UDAN Scheme, the applicable tax would also be 5% (non-creditable for goods) on the value of the passenger ticket excluding the subsidies provided by the Central Government and the State Governments.
Moreover, since the maximum airfare or cap prescribed for the Regional Connectivity Scheme (RCS) seats is inclusive of the applicable GST and the same is reimbursable to the airline operator(s) concerned at actuals from the Regional Connectivity Fund, there would be no impact on fares charged from passengers booked on RCS seats, the minister added.
