Travelling after GST 2.0: Tax hike hits premium flights, will rail passengers pay more too?

Will your journey price range take successful below the brand new GST regime? As the Goods and Services Tax (GST) Council on Wednesday authorised a two-tier construction of 5% and 18% for many items and providers, issues have grown over whether or not premium air tickets and prepare seats will now value more.Under the brand new construction, GST on premium financial system, enterprise and firstclass air tickets will rise from 12% to 18%, making fares in these classes more costly. Economy class passengers, nonetheless, will see no change, with the tax price staying at 5%. The revised charges for firstclass journey will take impact from September 22, this 12 months.With airfares set to rise for premium travellers, issues emerged over whether or not Indian Railways’ AC coaches would additionally face a better GST levy. However, in a reduction to coach passengers, GST on AC and premium coach tickets has been saved unchanged at 5%.Explaining the revised taxation, Prabhat Ranjan, senior director at Nexdigm, instructed ET, “At present, air tickets in business class, premium economy and first class attract 12% GST with input tax credit available. From September 22, 2025, this rate will be revised upwards to 18%, while economy class tickets will continue at a concessional rate of 5%. This means passengers flying in any class other than economy will see a higher GST component in their fares.”Meanwhile, non-AC prepare journey, together with Sleeper and 2S courses, stays exempt from GST and will proceed to be Nil-rated even after 22 September.“AC Classes (3AC, 2AC, 1AC, AC Chair Car and Executive Chair Car): At present, these attract 5% GST, and the same 5% rate will continue post September 22, 2025,” Ranjan instructed ET.Bimal Jain, CA and founding father of A2Z Taxcorp LLP, clarified the transition guidelines for air journey. He stated that for tickets aside from financial system class, the relevant GST price was 12%, which will improve to 18% from September 22.However, below GST, three dates are thought of, the date of bill, the date of cost, and the date of provide. If any two of those happen earlier than the speed change, the previous 12% price will proceed to use.“If the air ticket of the said class is booked before September 22, 2025, for any travel date and the payment is also made on the same day of booking the ticket, the GST rate will be 12%, since the date of invoice and the date of payment is before September 22, 2025.”Shivam Mehta, govt accomplice at Lakshmikumaran & Sridharan Attorneys, confirmed to the monetary day by day, “There is no change in the GST rate on the economy class air travel. It will continue to attract the GST rate of 5% without ITC. For travel in classes other than economy, the applicable GST has been increased to 18%, with service providers entitled to claim input tax credit. This has been confirmed under Serial No. 59 of the published FAQ.”