Aviation Ministry bats for 12% GST rate on air tickets

The Ministry of Civil Aviation has sent a proposal to the Finance Ministry on keeping service tax on air tickets within the 12 per cent bracket once GST is implemented, two government officials told ET Now.

The proposal also included the suggestion to keep ATF under GST, the sources said.

With ATF out of GST, there is a possibility that ticket prices will see a steep rise once GST is implemented. The Finance Ministry is unlikely to consider the ATF demand, since petroleum is out of GST, the sources added.

"They have to amend the constitutional amendment bill on GST if ATF is kept under GST, so that proposal is unlikely to be considered at all, " one of the officials said.

The rates committee on GST under the finance ministry is currently considering the proposal sent by the Aviation Ministry.

Till now, in the GST regime, which is likely to be implemented as early as July, air tickets can be kept under the 18 percent bracket, taking into account the current service charges levied.

Presently, the Centre and states levy taxes on ATF including excise duty and value added tax. A service tax of 6 per cent is levied by airlines for economy air travel and 9 per cent for non-economy air travel.