Will flight tickets be cheaper in new GST slab? Quick overview before your next vacation
On Wednesday (September 3), Finance Minister Nirmala Sitharaman, in a briefing, mentioned big reforms that will change the tax slabs.
GST bonanza
PM Narendra Modi assured the nation from the ramparts of the Red Fort, on Independence Day, of a big Diwali bonanza with regard to GST. All the changes will be implemented September 22 onwards.
Airfare taxes explained
The GST Council’s decision on air travel will not affect economy class flight tickets as taxes are maintained at 5%. But if you are looking at an upgrade, i.e. the business class then there is an extra 6% GST, which will increase the existing 12% GST to 18%.
Breakdown:
Airfare
Economy class ticket – 5% GST (unchanged)
Business class ticket – 18% GST
The real impact
According to the details released by the GST Council, premium services and goods will attract a higher GST, which is otherwise relaxed for other components mentioned in the list.
Tax to be levied on room tariff
An accommodation which costs lesser than INR 1,000 will have no taxes levied. Any stay that costs between INR 1,001 and INR 7,500 will attract a 5% GST without ITC (Input Tax Credit), which was earlier at 12% GST with ITC. A room tariff over INR 7,500 per night will have 18% GST added to the bill.
Room tarrif breakdown
Breakdown:
Room tariff per night
Up to INR 1,000 - No GST
INR 1,001 – INR 7,500 - 5% GST (without ITC)
Above INR 7,500 -18% GST (unchanged)
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