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sentences of GST: Air tickets for economy classes will be discounted from 1 July.
Delhi: New Delhi: Economy flights will be less expensive as the GST rate will be set at 5% compared to the previous 6%, starting July 1. For those traveling in BusiClass, however, tickets are becoming more expensive as the rate is increased from 9% to 12%.
"Governments' decisions to raise 5% and 12% taxes on Economic and Businessclass is a very good choice that will further enhance India's affordability tariff system. Governments were sensitized to the effects of a higher GST plate on manufacturing and consumers are clearly positive," said Sydney-based aerospace think-tank Capa Centre of Aviation.
GST Council has set four levels of 5 to 12 to 18 to 28 percent applicable to telecommunications, insurances, hotels as well as restaurant service. Mr Cappa also said that this should further stimulate internal transport, where India ranks third. India's total volume of passengers in 2016 was 100 million, only lagging behind the USA (719 million) and China (436 million).
"She added that once the GST effects on the economies are apparent in 1-2 years, do you anticipate that the high rate of GDP expansion in inland transport will resume in the short run with a further upward trend? This mood was also confirmed by the Yatra.com holiday website. "Overall, this seems to be a good step for the industry and should help to maintain dynamic economic upturn.
Prices for economies will be slightly lower, which is likely to boost further increases in the number of passengers in the aviation sector, while there will be modest increases in the number of passengers in coach class," said Sharat Dhall, COO, Yatra.com. Taxpayers' 5% and 12% respectively represent an enormous reduction for the sector, which was concerned about the GST bill published last year, which sets the rate at between 17% and 18%.
According to a PwC survey, this would have resulted in an 9% to 12% rise in flight costs for travellers. An important factor in maintaining GST low for airline traffic is that the GST scheme does not allow airline companies to apply a GST on jet propellant. Currently, airline companies can apply for a so-called Kenvat loan on the corporate tax on motor fuels.
You will now loose it because mineral oil based commodities, as well as jet engine fuels (ATF), are beyond the reach of GST.