Besides, the executives feel that input tax credit should be extended for economy class travel and not just for business class travel. Input tax credit allows an entity to deduct the levies paid for the inputs while paying the taxes on the final output. Since GST is applicable for goods as well as services, input tax credit provides a leeway for the entities concerned. “As input tax credit on inputs is not available for economy class (under the GST), it would result in costs to the airlines,” the executive said. According to executives, GST payments on procurement of goods, import of aircraft, aircraft spares are not available for economy class travel.

Source: Mint June 11, 2017 06:33 UTC