India’s aviation industry may come under an extra tax weight of up to Rs 15,000 crore yearly once the Goods and Services Tax is actualized, best industry officials have told the finance service ministry. Under the current aberrant tax administration, the industry needs to pay just about Rs 3,600 crore annually, as indicated by industry gauges, while its yearly income is pegged at Rs 60,000 crore.
Recommended: Free Download Gen GST Software for GST India
The extra tax weight may push aircraft, the vast majority of which have turned gainful, into misfortunes once more, coming as it does when worldwide fuel costs are erupting. In a meeting with revenue secretary Hasmukh Adhia, the carrier officials said the business should bear extra taxes on ticket deals, import of aircraft and aircraft parts, lease rentals, and exchange of substitution parts and products inside the nation.
Federation of Indian Airlines were the members present at the meeting including IndiGo CEO Aditya Ghosh, SpiceJet, chairman Ajay Singh, Jet Airways director-finance Ravichandran Narayan and GoAir general manager finance Joyakesh Podder.
There is no service tax on working lease of the aircraft, nor is there a business tax or esteem included tax buy or lease of planes. Import of airplane and flying machine parts are at present completely exempted from fundamental customs duty and countervailing duty (CVD) and additionally special additional duty (SAD).
This will convert into GST obligation of Rs 60 crore on obtainment of one aircraft machine. India’s aircraft – drove by IndiGo – lease more than 60 planes a year. The yearly additional weight will in this way be about Rs 4,000 crore. As of now, a carrier needs to pay 6% service tax on economy class tickets and 9% in the business class, an unwinding on the typical charge of 15%. No such reduction is probably going to be accessible under the GST administration.
Executives at the meeting disclosed handful of information regarding overall discussion, as said, “We have raised very serious concerns. It will be a massive burden for the industry, which is already operating in a very tough environment, If a plane is grounded in Chennai and I have to fly in spares from Bengaluru, that will be taxed, Since airlines operate across the country, we will now have to file multiple tax returns in each state. Also, for each transfer of stock, we have to file a different invoice, something we don’t do now. This is extremely cumbersome and will increase paperwork by 100 times.”