The aviation sector in India is a fast-growing industry, offering a wide range of services from passenger transport to cargo handling and aircraft maintenance. Under the Goods and Services Tax (GST) regime, understanding tax applicability is crucial for airlines, logistics providers, and travelers alike.
GST impacts various components of aviation services, such as:
👥 Passenger air transport
📦 Air cargo and freight services
🔧 Aircraft maintenance and repair
🏢 Ground handling and airport services
💺 Charter and non-scheduled flights
Economy class: ✅ 5% GST (no Input Tax Credit)
Business class: 🔺 12% GST (with Input Tax Credit on services)
When ticket is sold in India for international travel:
Zero-rated (export of service) if place of supply is outside India
✅ 5%/12% GST may apply based on class if both departure and arrival are in India
Note: GST is calculated based on the place of supply and class of travel.
🔹 18% GST applicable on freight for transportation of goods by air within India.
✅ Zero-rated when the destination or origin is outside India, treated as export of service.
Exporters often benefit from Input Tax Credit (ITC) and refund claims.
🛠️ Aircraft maintenance, repair & overhaul (MRO) services: 5% GST (with full ITC eligibility)
🧩 Spare parts for aircraft: Generally 5% or 18% depending on classification
The reduced GST rate on MRO is designed to encourage domestic servicing of aircraft and reduce overseas dependency.
🛄 Ground handling, cargo loading/unloading: 18% GST
🏗️ Airport development and operation services: 18% GST
🚪 Aviation security and passenger facilitation: 18% GST
🧳 Airport retail and duty-free shops: GST depends on location and sale type
🛩️ Private charter flights (non-scheduled):
18% GST for leisure or personal use
12% GST if for business use with eligible ITC
🚁 Helicopter services:
Tourism/leisure: 18% GST
State or government contracts (e.g., medical evacuation): May be exempt or attract concessional rate
| Aviation Service | GST Rate | Input Tax Credit (ITC) |
|---|---|---|
| Economy class domestic air travel | 5% | ❌ Not allowed |
| Business class domestic air travel | 12% | ✅ Allowed |
| Domestic air cargo | 18% | ✅ Allowed |
| MRO (Maintenance, Repair, Overhaul) | 5% | ✅ Allowed |
| Ground handling and airport services | 18% | ✅ Allowed |
| Charter flights (business use) | 12%–18% | ✅ Allowed (case-based) |
| International cargo/passenger travel | 0% (export) | ✅ Refund available |
The GST regime has brought uniformity and transparency to the aviation industry, but the tax implications vary across services:
✈️ Passenger travel is taxed differently based on class and destination.
🔧 MRO services enjoy a reduced rate to boost domestic aviation infrastructure.
📦 Air cargo and airport services are generally taxed at 18%, with ITC benefits.
Overall, while input tax credit mechanisms offer relief to operators, the industry still calls for simplified compliance and clarity in cross-border services.