Launched in 2017, GST is a broad-scope indirect tax that has revolutionised the taxation of goods and services. It has deeply impacted the economy of India. Air tickets have been also subject to the unified and indirect GST since its implementation in July 2017. GST is imposed on them at the point of sale. BThis new system has reformed how we pay taxes, particularly travel GST rates, while significantly impacting our country’s economy.
Input Tax Credit or ITC is a primary concept of GST that has eliminated the cascading effect of taxes. Every company that has Goods and Services Tax registration is eligible to claim the ITC. Learn about GST on air tickets through this article.
International Flight Tickets GST Rate
GST is levied on air tickets at the point of sale. Thus, Goods and Services Tax on international flight tickets is applicable if the ticket is booked from Ex-India; the departure country is India. Even if the airline is international, they are bound to collect GST on the air tickets. Moreover, they are also obliged to share the GST Invoice with the travelers. If the point of sale is not in India, GST will not be applied to that Air ticket; thus, GST invoices for international flights for such cases will not be applicable.
Under the previous system, taxes were imposed on all airline tickets. But, the tax rate under VAT was 8.4% for business class tickets and 5.6% for economy class tickets. Thus, since the introduction of the Goods and Services Tax on airline tickets, the overall tax imposed has been lowered.
But it is essential to point out that even though the taxation rates have been changed, the taxation principles applied under the service tax era continue to be imposed in the new regime of air ticket GST rate, particularly on international tickets. This means that non-stop flights from India to abroad are relatively inexpensive. This eases Indian airlines from fearing that travellers will opt to fly with other carriers with layovers.
|Seat Type||GST on Domestic Flights||GST on International flights|
|Business or Premium Economy||12%||12%|
How Can Business Travellers Avail the GST Input Tax Credit on Flight Tickets?
Every service provider should collect GST for offering goods and services. But, when these services are used for business purposes, customers can get input credit. Hence, the organisations where the employees are subject to travel can avail of GST input on flight tickets booked for their employees travelling for official work. The companies can claim Goods and Services Tax inputs for their tax to book flight tickets. This will decrease the overall tax that they are supposed to pay.
What is required to claim ITC in GST?
Customers or companies that want to claim the Input Tax Credit on Goods and Services Tax on air tickets must provide the following information-
- Company’s GST number and GST Registration Details
- Company’s registered name
- Company’s registered contact information
- Company’s registered address
- GST Return Filing
If a customer has offered the Goods and Services Tax No. of their business entity when booking the air ticket, then the client can get the Input tax credit on the GST amount of their air ticket. For this, the customer would need the GST Invoice with the travel GST rate, which is offered by the airline to the customer. Usually, Domestic Airlines like SpiceJet, Indigo, Vistara, Air-Asia, Go-First etc., provide GST invoices immediately after booking the air ticket or after the travel is completed. But in the case of international airlines, a GST registration invoice for international flight bookings is provided 15-45 days after the travel date.
As a frequent flier, you should be happy that the GST on air tickets has been positive. To add more, for domestic carriers in India, this impact is highly advantageous and boosts the Indian economy.
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