The already struggling airline industry with the implementation of GST is confronting issues on the cost front and it is expected that flyers will have to dole out additional money in the near term towards fare cost.
The new charges under GST have the potential to make the saddled industry sick and can drain its profitability. As per the senior official, GST would cause an additional burden of a whopping Rs. 4750 crore. So, to overcome the problem, the industry is making a call for relief under the new indirect tax regime.
With the implementation of GST, airlines will have to pay GST on re-import of aircraft engine and other parts sent for service to foreign nations. Also more custom levies are further adding to the problem of airlines. GST is also charged upon transfer of aircraft components between states, also import of aircraft parts attracts an IGST of 28% and other charges.
Conversely, unless the demand of the aviation industry is met, it is expected to hugely impact passenger growth over the next twelve months. Also, like other fuels, industry is also demanding that air turbine fuel should also become the part of GST regime.