Saturday, June 24, 2017

Taxation norm for flights abroad to stay same with GST

New Delhi: In a major relief to airlines, the Centre on Friday made clear that the principles applied to tax international air travel would remain unchanged under the Goods and Services Tax (GST) regime set to roll out on July 1.

The clarification comes in the wake of concerns raised by domestic carriers, and flagged by the Civil Aviation Ministry, that non-stop flights were likely to become more expensive than flights with stopovers given some ambiguous wording in the norms relating to GST.

Airlines feared that passengers planning to travel say Delhi-New York non-stop could opt to fly with Gulf carriers if they found the post-tax fares for a Delhi-Dubai-New York ticket to be more attractive on account of GST being levied only on the first leg of the overseas flight.

“It was clarified today that the new GST rates will apply based on old criteria on international tickets,” a senior Civil Aviation Ministry official said following a stakeholders’ meeting chaired by Minister of State for Civil Aviation Jayant Sinha. The same rules prevalent under service tax would continue to apply under GST, the official added.
23/06/17 Somesh Jha/The Hindu