IATA (International Air Transport Association) has asked for some modifications in the Airline tickets rate under GST. According to IATA, the Aviation sector was already under high tax burden and GST should help the sector abide by global standards.
IATA has been working closely with GST (Goods and Service Tax) Secretariat to discuss some issues of the aviation sector, to which Alexandre de Juniac, the Chief of IATA said, “the GST regime needs to adhere to international standards and principles”.
Juniac stated in front of reporters, “We have called for a zero-rating for international flights when the GST comes into effect next April. This seems unlikely. To limit its damage to the sector’s competitiveness, we would at least hope for an abatement in the rate.”
He added, “Airlines in India faced a heavy tax burden, including the imposition of service tax to services rendered abroad, including those for overflight charges, global distribution systems, and international tickets.”
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As per Juniac, this went against the international principles established by the governments of the UN body ICAO (International Civil Aviation Organisation). The IATA Director General and CEO said that he had shared these and other concerns with the government on his two-day visit.
Apart from GST, the other major concerns include high taxation over aviation fuels charged by every state along with excessive airport charge and the service tax imposed on air tickets. Juniac also stated that “while the passenger experience has improved, the impact for airlines has been far less positive.”
Based on the experiences he had in India and other countries, Juniac commented that “IATA does not support privatization of Airports, nor we are officially opposed to it. I am hard pressed to find an example where the results, overall, have been positive.”
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He added, “A private sector mindset can add value to airport projects with efficiency, cost effectiveness, entrepreneurial spirit, and so on. But we need stronger regulatory framework than exists today to ensure that there is a balance struck between commercial and national interests.”
