The GST plays a significant role in determining travel costs for passengers in India. The GST slab for flight tickets is distributed across 5% and 12%, depending on the ticket type. GST applies to both domestic and international flight tickets, making it essential for travellers to understand these charges. As civil aviation emerges as a booming sector of the Indian economy, staying informed about GST rates is important. Economy class tickets generally attract a GST rate of 5%, while business class tickets are subject to a 12% GST rate.
What is GST on Flight Tickets?
GST on flight tickets typically falls within the 5% or 12% tax brackets, depending on the type of flight and class of travel. Whether you are a regular flyer, a business traveller, or someone who wants to understand GST on air travel, this section details the applicable GST rates for both domestic and international flight tickets,
Previous Taxation vs. GST Regime
The Services Tax was applicable on all bookings made whether it is economy class or the business class. Tax rate under the Service Tax regime was:
| Tickets | Rate of Service Tax |
| Economy Class | 5.6% |
| Business Class | 8.4% |
Under the new regime, the GST Council has lowered the tax rate for economy class flight tickets to 5%. However, the business class tickets will attract a higher tax at 12% after GST implementation from 1st July 2017. Thus, the revised scenario will be-
| Tickets | Rate of GST |
| Economy Class | 5% |
| Business Class | 12% |
A Comparison of Prices – Pre and Post GST Economy Class Fare under both pre-GST and GST regimes
| Fare/Charge | Amount under Service Tax | Amount under GST |
| Base Fare | 2,000 | 2,000 |
| Airline Fuel Charge | 700 | 700 |
| CUTE Charte | 50 | 50 |
| Passenger service fee | 239 | 239 |
| User development fee | 150 | 150 |
| Airline Service Tax @5.6%/@5% | 154 | 137.5 |
| Other Surcharge | 12 | 12 |
| Total fare | 3,305 | 3,288.5 |
Business Class Fare under both pre-GST and GST regimes-
| Fare/Charge | Amount under Service Tax | Amount under GST |
| Base Fare | 8,000 | 8,000 |
| Airline Fuel Charge | 2,800 | 2,800 |
| CUTE Charte | 200 | 200 |
| Passenger service fee | 700 | 700 |
| User development fee | 400 | 400 |
| Airline Service Tax @8.4%/@12% | 1,015.4 | 1,320 |
| Other Surcharge | 100 | 100 |
| Total fare | 13,216.4 | 13,520 |
FAQs
Q1. What changes occurred in flight ticket taxation after GST implementation?
GST replaced multiple taxes, offering a uniform tax rate of 5% for economy class and 12% for business class, simplifying the taxation process for both domestic and international flights
Q2. What happens if the airline charges a surcharge on flight tickets?
The surcharge is included in the total GSTable amount, and GST is applied to the entire amount, including surcharges.
Q3. How does GST on business class tickets differ from economy class tickets?
Business class tickets are subject to a 12% GST rate, while economy class tickets are taxed at 5%.
Q4. Is GST charged on additional flight charges like fuel and service fees?
Yes, GST is applicable on additional flight charges such as fuel charges, CUTE fees, and passenger service fees, depending on the ticket class.
Q5. How does a full refund for a cancelled flight affect ITC claims?
If a full refund, including GST, is received for a cancelled flight, ITC cannot be claimed as the GST is reversed by the airline.
Q6. What is the process to claim ITC on flight tickets?
To claim ITC, businesses must provide their GST number during booking, obtain a GST-compliant invoice after the flight, maintain the invoice and itinerary, and then claim ITC in their GST returns.
