Home / Business and Economy / India Airlines Seek ATF Under GST, Tax Relief
India Airlines Seek ATF Under GST, Tax Relief
8 May
Summary
- Airlines want ATF under GST for input tax credits.
- Proposal to raise GST on economy tickets to 18%.
- States' revenue concerns are the main hurdle.
Indian airlines are lobbying the Finance Ministry for crucial GST framework changes amidst rising operational costs, exacerbated by geopolitical tensions and volatile fuel prices. The industry's primary demand is to include Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) regime. This would allow airlines to claim Input Tax Credit (ITC) on fuel taxes, significantly reducing their expenses.
In addition to ATF, airlines are proposing an increase in GST on economy class tickets from 5% to 18%. This shift, coupled with full ITC benefits, aims to help airlines utilize substantial accumulated tax credits and improve their liquidity. They also seek relief on taxes paid under the Reverse Charge Mechanism (RCM) for services like MRO.
The inclusion of ATF under GST has constitutional backing but faces resistance from states concerned about losing VAT revenue. The upcoming GST Council meeting will be pivotal in determining if these long-pending proposals gain traction or remain under discussion.
