Civil Aviation ministry wants GST deferred

The Ministry of Civil Aviation (MoCA) has asked the Union government to defer the implementation of Goods and Service Tax (GST) by two months as some of the airlines, including national carrier Air India, have expressed their apprehension at meeting the deadline which is scheduled from July 1.

The ministry said the major airlines are dependent upon the global distribution system (GDS) software for booking tickets, and it will require major changes in the system for amalgamating the new taxation regime. The letter to Hasmukh Adhia, Revenue Secretary, was reportedly written by Civil Aviation secretary Rajiv N Choubey on Monday.

Interestingly, on Wednesday, Adhia had tweeted that rumours about GST implementation being delayed were false, and people should not be misled by it.

In their letter to the government, the MoCA also raised concerns, claiming that the GST regime will benefit foreign carriers more than domestic ones for two reasons, i.e., input tax credit and international travel. Therefore, a full tax credit should also be extended to economy class travel as well.

The differential input tax credit between the economy and business classes will adversely affect airlines, rating agency ICRA had stated in its latest report released in May.

“With the airlines generating a major …read more