Air travelers in India know that there is a huge difference between the basic fare and the final ticket price and the reason for this is GST rate as well. As it is being seen day by day, passengers are flying more, whether it is a domestic or international journey. So, it is very important for travelers to know how GST is applied on flight tickets and how much percentage of GST has to be paid. This is important not only for the traveler but also for businesses managing corporate travel expenses.
This article provides a deep insight into the GST rate Hike on flight tickets, exemptions, how it impacts passengers, and the aviation industry at large.
Table of Contents
What is GST and Why Does It Apply to Flight Tickets?
GST was implemented in India on 1 July 2017. It is a unified indirect tax system which was implemented to eliminate old multiple taxes such as service tax, VAT and excise duty. GST is imposed on the supply of goods and services and airlines come under the category of ticket service, then tax has to be paid accordingly. GST has a transparent tax structure in which the rate is clearly mentioned by the government. Airlines collect GST from the traveler at the time of ticket booking and remit it to the government.
Comparison: GST Before and After September 22, 2025
| Ticket Class | GST Rate (Before Sept 22) | GST Rate (From Sept 22) |
|---|---|---|
| Economy Class | 5% | 5% (unchanged) |
| Premium Economy / Business / First Class | 12% | 18% |
The 56th GST Council meeting (Sept 3, 2025) discussed flight ticket GST rates above 5% and 18%, which will promote affordable tourism, luxury segments will now contribute more to government revenue.
GST Rate on Flight Tickets in India
The GST rates differ depending on whether the ticket is for domestic economy class, domestic business class, or international travel.
| Category | GST Rate | Details |
| Domestic Economy Class | 5% | Lowest GST bracket for general passengers. |
| Domestic Business Class | 12% to 18% | Higher rate since business class is considered a premium service. |
| International Flight Tickets (Economy & Business) | 0% | GST is exempted on international tickets, but other surcharges may apply. |
The Bottom Line for Flyers
- Economy class stays cheap: 5% GST continues without change.
- Premium class tickets get pricier: From 12% to 18% — a notable increase.
- Booking timing matters: Pre-Sept 22 bookings locked in lower (12%) GST.
Key Insights About GST on Flight Tickets
Domestic Economy Class – 5% GST
- Most Indian travelers prefer flavored domestic economic flights
- The 5% GST applies to basic fare, not for airport charges and fuel surcharges.
- Example: If the basic price of flight ticket is Rs.5000 then GST will be Rs.250 which will make the total amount Rs.5250 (excluding other charges)
Domestic Business Class – 12% to 18% GST
- The reason why more GST is levied in the business class is in the luxury and premium category.
- Example: If the flight ticket fare is Rs.20000, then GST previously will be Rs.2400 now after 18% Rs.3,600 due to which the final price will increase by a lot.
International Flight Tickets – Exempt from GST
Passengers who book international flights do not have to pay GST; they have to pay separate charges such as airport tax, fuel surcharge or service fees
GST and Corporate Travel: Can Businesses Claim Input Tax Credit (ITC)?
The important aspect of GST is that air travelers can claim Input Tax Credit (ITC). Businesses that pay GST can claim ITC for employees on domestic air travel. ITC is provided if they have traveled for official purposes.
- Economy class (5%): Companies can claim ITC if GSTIN is provided during ticket booking.
- Business class (12%): Higher ITC claim possible due to the higher tax component.
- International travel (0%): No GST is levied, so ITC cannot be claimed.
Exemptions and Special Rules
- Children and Infants – GST does not apply to infants under 2 years old and not occupying any seat.
- Government Bookings – In some cases, government bookings may get GST relaxations.
- Frequent Flyer Rewards – Tickets booked fully through loyalty points are not subject to GST (but partial payment with cash may attract GST on that portion).
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