Aviation Ministry seeks GST roll out in September, writes to FinMin

The Civil Aviation Ministry has requested the Finance Ministry to defer the rollout of the Goods and Services Tax to September, reports the Hindu. The airlines claim it will be difficult for them to make the switch to the new indirect tax regime by July, when the GST is set for a pan-India implementation.

At the heart of airlines' request lies their difficulty in changing the global ticketing system, which is being used by travel agents to book tickets, in such a short time.

“We have asked the Finance Ministry to give further time for implementation of GST, expressing the airlines’ view that effecting a change in the global ticketing system would require time,” a senior Aviation Ministry official told the Hindu. This official added that the letter to the Finance Ministry was sent on Monday.

A few domestic airlines, including the state-owned carrier Air India and Jet Airways, feel they need additional time to change the system before they could on-board GST properly.

The government is determined to keep its July date for GST rollout. On Monday, Revenue Secretary Hasmukh Adhia had tweeted saying rumours claiming a different date for GST rollout are not to be believed.

The aviation ministry has also asked for equal treatment of direct international flights and connecting flights with regards to taxes.

The official mentioned that, in a letter to Revenue Secretary Hasmukh Adhia, the Aviation Ministry has expressed concern that the GST structure would give more advantage to foreign carriers than the domestic ones regarding international travels and input tax credit. The input tax credit for the economy class is only effective on services, and not goods.

There has been constant speculation about the implementation date of GST. Several sections of the industry have been complaining about shortage of time along with the West Bengal government.