Monday, June 26, 2017

Planning to travel after July 1? Everything you need to know about post-GST fares

Are you planning your holidays in July? Be ready to shell out more if you are travelling by train in an AC coach or by air in business class as the Goods and Services Tax (GST) is set to roll out on July 1. Travel for aam aadmi, however, will not get expensive.
Economy-class air travel will be cheaper with the tax rate fixed at 5% against the present 6%. However, business class tickets will be costlier with a 12% tax against the present 9%. The new tax regime will also make direct flights to key international destinations more expensive than stopover flights as GST is to be charged on the first leg of the flight.
“The first leg of the flight may be Delhi-Dubai for a passenger flying to the US via Dubai, but an Indian airline like Air India that flies directly to the US has to charge GST for the full ticket until the US, making it expensive for the passenger booking a direct flight, thus, making it difficult for Indian carriers," an airline executive told ET.
There are other reasons which may lead to increase in the air fares. A senior airline executive told ET that import of spares and aircraft lease rentals would be taxed which could increase operational costs and might results in higher fares. "Any new tax on the aviation industry, which operates under thin margins, may drive fares higher,” he said.
Also, from July 1, sudden plans will become difficult due to limited availability of seats. Those who want to travel affordably by air will have to book their tickets well in advance. There is another reason for limited availability of seats: a number of travellers might not prefer to travel in business class due to higher fare.
26/06/17 Economic Times