On the recommendation of the 54th GST Council Meeting, the Ministry of Finance has notified 5% GST on passenger transportation with or without accompanied baggage, by air, in a helicopter on seat share basis.
As per the notification the transportation of passengers, with or without accompanied baggage, by air, in a helicopter on seat share basis will attract 5% GST subject to the fact that credit of input tax charged on goods used in supplying the service has not been taken.
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Impact of Notification Imposing 5% GST On Passenger Transportation
This will bring major relief for airlines as it will put to rest the recent show cause notices where a GST demand of about Rs.39,000 crores was raised by the Directorate General of GST Intelligence (DGGI) on foreign airlines operating through branch offices in India.
GST Rate On Chartered Services
The GST rate for chartered air services in India depends on the purpose of the flight. For passenger transportation, if the chartered flight is for domestic travel, the GST rate is 5% with Input Tax Credit (ITC) only on input services (no ITC on goods).
For international charter flights, the services are zero-rated, meaning no GST is applicable as it is treated as an export of services. Meanwhile, for non-passenger services (e.g., for cargo or other purposes) the GST rate is generally 18%, similar to other non-passenger air services.
No change has been notified in respect of GST rate on chartered services.
Effective Date
The notification notifying 5% GST on passenger transportation will be effective from 10 October 2024.
Notification Details
Notification No. 07/2024
Date: 08/10/2024
