When it comes to flying in India, there is often confusion around the Goods and Services Tax (GST) that is levied on airline tickets. As a consumer, understanding the GST on airline tickets can be beneficial when it comes to budgeting and planning travel expenses. In this article, we’ll take a closer look at everything you need to know about GST on airline tickets in India.
What is GST?
Before diving into the specifics of GST on airline tickets, it’s important to understand what GST is. GST is a value-added tax that is levied on most goods and services in India. It is a comprehensive tax that replaced several indirect taxes that were previously in place, such as excise duty, service tax, and value-added tax.
How does GST apply to airline tickets?
When it comes to airline tickets, GST is applied to the fare and other charges associated with the flight. Airline tickets are categorized under two types of GST rates – 5% and 12%. Economy class tickets are taxed at a rate of 5%, while business class and first class tickets are taxed at a rate of 12%.
In addition to the base fare, GST is also applied to several other charges associated with the ticket, such as the fuel surcharge, airport development fee, and passenger service fee. This means that the total amount of tax levied on the ticket can vary depending on the route and class of travel.
Are there any exemptions or discounts available?
While GST is applicable to most airline tickets, there are certain exemptions and discounts available. For example, tickets issued under the regional connectivity scheme (UDAN) are exempt from GST. Additionally, airlines are allowed to claim input tax credit on aviation turbine fuel (ATF), which can lead to a reduction in prices for consumers.
How to calculate GST on airline tickets?
To calculate the GST on an airline ticket, you simply need to multiply the fare and other charges by the applicable GST rate. For example, if the base fare is INR 5,000 and the fuel surcharge is INR 500, the total fare would be INR 5,500. If this is an economy class ticket, GST would be levied at a rate of 5%, which would be INR 275. Therefore, the total amount payable would be INR 5,775.
Conclusion
Understanding the GST on airline tickets can help consumers plan their travel expenses more effectively. While most airline tickets are subjected to GST at a rate of either 5% or 12%, there are several exemptions and discounts available. By keeping the GST rate in mind and factoring it into your travel budget, you can avoid unexpected additional costs and make more informed travel decisions.
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