How Will GST 2.0 Affect Aviation?

The new tax reforms (GST 2.0) will be implemented from the 22nd of September 2025 in India. They focus on simplification and rationalization of tax rates, by removing certain redundant GST slabs. After 8 years of GST, the Indian government have removed the 12% and 28% tax slabs. Only the 5% and 18% slabs remain. Additionally, 0% (exempt) and 40% (for luxury items or harmful items (like tobacco)) have been introduced.


Ticket Prices:
  • For economy class travel, tickets remain at 5% GST.
  • For premium cabins (premium economy, business and first class), tax rate increases from 12% to 18%.
  • Note that if you book before September 22, the 12% GST still applies.

  • Tax rates on luxury aviation (private jets and charters) increase to 40%, from the previous rate of ~31%.

Aircraft Components:
  • Since July 2024, aircraft parts and maintenance services attract a 5% GST, improving MRO (maintenance, repair and overhaul) industry's efficiency.
Aviation Fuel
  • As of now, Aviation Turbine Fuel (ATF) still remains outside of GST.
  • It continues to be taxed at 11% central excise duty plus VAT, which is different per state.

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