Controversial GST Hike on Premium Air Travel Sparks IATA Outcry
The IATA criticizes the recent decision to increase GST on non-economy flight tickets in India from 12% to 18%. The aviation industry fears this hike could negatively impact premium travel and route viability, despite India's booming aviation market with expected passenger traffic growth.
- Country:
- India
The International Air Transport Association (IATA) has expressed disappointment following a decision to raise the Goods and Services Tax (GST) on non-economy class flight tickets in India. The GST Council's move, effective from September 22, elevates the tax from 12% to 18%, a decision IATA views as lacking justification.
The GST increase could inhibit premium travel growth, impacting route viability amid an otherwise blossoming Indian aviation sector, remarked Sheldon Hee, IATA's Regional VP for Asia Pacific. India's aviation industry, pivotal to its economic growth, could suffer from diminished demand and profitability as a result.
Despite the premium sector being less sensitive to price changes, Jitin Makkar of ICRA noted potential downtrading to economy class due to the new tax rate. The development comes as India, the third-largest aviation market, projects a passenger traffic surge to 500 million by 2030.
(With inputs from agencies.)
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