Let us look at Some Areas Where Gst Impact :
• The tax rate for economy class flight tickets lowered to 5%.
• Business class tickets will attract a higher tax at 12%.
Comparison of Prices
With this reduction in rates on domestic air travel, budget traveling will clearly get better. A frequent flier will definitely find the impact of GST on air fares. Also, the reduction in tax rates is a positive development for low-cost domestic carriers as a major portion of the revenue generated from airlines comes from economy travelers.
• Airlines can only claim Input Tax Credit on input services for the economy class.
• But for the business class, they can claim ITC for only spare parts, food items, and other inputs, apart from fuel.
The transport sector is the most crucial part of a business chain. Roadways will have an advantage in GST on short distances while Railways will see the impact on long distance travels.
• Non AC train travel (including in local trains and metro) has been exempt
• AC train travel will attract 5 %. Ticket prices for AC trains will increase marginally as current service tax is at 4.5 %.
• The rate is kept low as they will not be allowed Input Tax Credit
Exemptions under railways
• Travelling in metro;
• Local trains; and
• Religious travel including Haj yatra
GST will be applicable on –
• Transport of coastal goods;
• Transport through National waterways; or
• Transport through Inland waterways services
Under GST, Transport sector is closely monitored and the tax rates are apt. Transportation sector has accepted the changes made under GST by the government of India.
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