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GST on Aviation Industry .pdf

Original filename: GST on Aviation Industry.pdf
Title: PowerPoint Presentation

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The implementation of Goods
and Service Tax (GST) Act
and its affect on Indian
Aviation industry.

Drawbacks of GST on Aviation Industry

Aircraft lease/ purchase now taxable

Increase in maintenance costs

Compliance Cost

Import of Aircraft and Its Spare Parts

Aircraft lease/ purchase now taxable
Currently, bearers do not pay any indirect taxes on the
lease of aircraft in India. Under the financial lease
arrangement, service tax is applicable only 10% of the
lease apartments. After the GST Model law, GST paid
on leasing of goods (i.e. aircraft) that would pass as a
service and in the hands of the carrier.

Increase in maintenance costs
Currently, maintenance and repair costs of aircraft
products are tax-free outside the India but under the
GST Model Law maintenance and repair cost out of
India are taxable. So After GST Implementation
maintenance cost is liable to increase.

Compliance Cost
Under GST registration process, the tax is needed to be
collected from each and every state from a separate
portal while in the previous case, there was only a
single platform to collect the taxes which means that
the compliance cost will go up.

Import of Aircraft and Its Spare Parts
Under GST if the exemption is not provided, then
import price will increase.While currently, import of
aircraft and its spare parts is exempted from customs

Overall, the aviation sector will see a steep hike in the
costing and pricing strategy as the GST will include this
industry at an aggregate level.
Source : https://goo.gl/bfER1y

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