Air Tickets May Drop After GST Council Meeting In New Delhi

The 56th GST Council Meeting scheduled for September 3-4, 2025 in New Delhi will be presided over by the Union Finance Minister and the Finance Ministers from all the states and Union Territories of India to bring Aviation Turbine Fuel (ATF) under the GST regime. In the present scenario, the ATF, unlike petrol or diesel, does not fall under the centralized GST. Instead, ATF is subject to a tax put by different states in addition to 11% central excise duty. Goods and Services Tax Council is working out on the norms that will offer exquisite tax relief to foreign airlines for certain types of import services offered by them.

Such a stand has been earmarked after many foreign airlines having operational bases in different parts of India have been accrued GST notices for defaulting on the Non-payment of the Taxes in lieu of the imports by Indian businesses over a period of time. In the present scenario, the GST rate applicable on flight tickets for the economy class is 5%, while it is 12% on the business and the premium class. The GST slab rate is also applied to domestic and international travel. With the new tax regime, the GST on economy class will be reduced from the existing 5% to 0 percent. In fact, there is absolutely no exaggeration over the fact that the current move led by the Goods and Services Tax Council will give tax relief to foreign airlines owing to a specific league of services offered by them.

With respect to other distinctive categories within the travel segment viz-a-viz tour packages and hotel bookings, the GST would vary on the basis of category of the service and the respective provider.

Verdict

The 56th GST Council Meeting holds the potential to reshape India’s aviation sector by easing the burden of taxes on flight tickets. If ATF is brought under the GST regime and the tax on economy fares is reduced to zero, passengers can expect cheaper flights for both domestic and international routes. Airlines, too, may benefit from a simpler, more transparent tax structure that lowers operational costs and improves competitiveness. While the final decision rests on policy execution, travelers have strong reasons to be optimistic about more affordable air travel in the near future.