Government reduces GST to 5 percent on aviation services

Government reduces GST to 5 percent on aviation services

Eleven states and Union Territories have already reduced VAT on turbine fuel

The Ministry of Civil Aviation has notified the reduction in the Goods and Service Tax (GST) from 18 percent to 5 percent on domestic maintenance, repair, and overhaul services in the aviation industry.

The press release issued by the ministry stated that the average number of passengers carried in the pre-Covid Financial Year 2019–20 was around 4 lakh per day. On 6 March 2022, domestic airlines in India carried around 3.7 lakh passengers.

The issue of a reduction of Value Added Tax (VAT) on aviation turbine fuel (ATF) had been taken up with the states and the Union Territories.

Eleven states and Union Territories have reduced the VAT on ATF below 5 percent. These include Andaman & Nicobar Islands, Dadar & Nagar Haveli, Daman & Diu, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Ladakh, Madhya Pradesh, Tripura, Uttar Pradesh, and Uttarakhand.