GST on Air Tickets In 2022: Check Tax Rates & HSN Codes Here!

Launched in 2017, Good and Services Tax (GST) is a broad scope indirect tax that has revolutionised taxation of goods and services. It has profoundly impacted the economy of India.

Air tickets have been subject to the unified and indirect Good and Services Tax (GST) since its implementation in July 2017. GST is levied on them at the point of sale.

Let us discuss the GST on air tickets in 2022. You can also check out the various taxes and their rates for air tickets here.

Announcement of Changes

Recently, the GST Council announced the rates of Goods and Services Tax. These rates apply to the supply of various goods and services in India.

The distribution of these rates occurs across different rate bands, which are 5%, 12%, 18%, and 28%. Civil aviation is one of the booming sectors of the Indian economy that has grown exponentially. However, this growth took place under the VAT and Service Tax regime. Therefore, the implementation of GST affects the development of the civil aviation sector. There is certainly an GST on air tickets, but the main question is how?

The Old Tax vs. New Tax

Service Tax as applicable on all air ticket bookings. The tax rate applicable under the VAT regime was 5.6% for an economy class ticket and 8.4% for a business class ticket.

The GST Council lowered the tax on domestic and international Economy class tickets to 5%, keeping in line with their aim to make air travel affordable for the masses. On the other hand, the domestic and international Premium class tickets are dearer under the GST regime with a 12% tax.

Type of Ticket	GST Rate
Business Class	12%
Economy Class	5%

Pre- and Post-GST Price Comparison

There has been a boost in domestic air travel after GST. It is due to the reduction of air prices. Budget travellers, therefore, have plenty to rejoice in happiness as a substantial financial burden shall be lifted off them. They can now plan for the upcoming holidays without having to worry about the finances. The representation of the difference is in the tables below.

Below is the Economy Class Fare under the Service Tax:

Charge or Fare i	Amount in ₹
Charge of Base	2000
Charge of Airline Fuel	700
CUTE Charge Fee For Public Charge	50
Fee For Passenger Service	239
Fee For User Development	150
Airline Service Tax at the Rate of 5.6%	154
Surcharge That is Other Than These	12
Total Charge or Fare	3305

Below is the Economy Class Fare under the Regime of GST:

Charge or Fare	Amount in ₹
Charge of Base	2000
Charge of Airline Fuel	700
CUTE Charge Fee For Public Charge	50
Fee For Passenger Service	239
Fee For User Development	150
Airline Service Tax at the Rate of 5%	137.5
Surcharge That is Other Than These	12
Total Charge or Fare	3288.5

On the other hand, an increase has taken place for the business class fares leading to higher costs. However, there is not much to worry about as the rise is only marginal from 9% to 12%. Moreover, this slight increase has not deterred business travellers from traveling much.

Below is the Business Class Fare under the Service Tax:

Charge or Fare	Amount in ₹
Charge of Base	8000
Charge of Airline Fuel	2800
CUTE Charge Fee For Public Charge	200
Fee For Passenger Service	700
Fee For User Development	400
Airline Service Tax at the Rate of 8.4%	1016.4
Surcharge That is Other Than These	100
Total Charge or Fare	13216.4

Below is the Business Class Fare under the Regime of GST:

Charge or Fare	Amount in ₹
Charge of Base	8000
Charge of Airline Fuel	2800
CUTE Charge Fee For Public Charge	200
Fee For Passenger Service	700
Fee For User Development	400
Airline Service Tax at the Rate of 12%	1320
Surcharge That is Other Than These	100
Total Charge or Fare	13520

If you are a frequent flier, you should be happy with the positive GST on air tickets. Moreover, this impact is highly beneficial for domestic carriers in India and would boost the Indian economy.

However, the airlines must pass on the benefits of the GST to customers. Only then will the GST for flight tickets indeed be a success. Most noteworthy, economic travellers contribute a significant portion of airlines revenue.

Also Read:

1) GST on the Indian Economy?
2) GST on the E-commerce Industry in India?
3) GST on the logistics sector in India?
4) GST on IT industry in India?

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FAQs

Q. Which type of carrier has benefited the most from GST levied on air tickets?

Ans: The GST on air tickets has benefited the low-cost domestic carriers the most. It does not mean that other types of carriers have not benefited from GST. Every carrier is likely to benefit from the positive effect of GST.

Q. Has GST on flight tickets been beneficial for economical travellers?

Ans: Yes, the GST on air tickets has been beneficial for economical travellers. Budget travellers are the ones to derive the most benefit from GST in comparison to other travellers.

Q3. Who GST benefits more: high-frequency fliers or low-frequency fliers?

Ans: The GST on air tickets benefits the high-frequency fliers more than the low-frequency fliers, although both types can benefit from it.