Economy class air travel will become cheaper with tax rate fixed at 5% against the existing 6%, under the upcoming goods and services tax (GST) regime from July 1.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

However, for those travelling business class, tickets will become dearer as the tax will go up from 9% to 12%. 

Industry experts say that today's announcement is in line with the government's aim to make flying affordable for the masses.

"Government's decision to levy 5% and 12% tax for economy and business class is a very good decision which will continue to support affordable fare regime in India. The government was sensitive to the impact of higher GST slab on industry and the consumer is significantly positive," according to Sydney-based aviation think-tank CAPA Centre of Aviation.

The GST Council finalised four tax rates of 5, 12, 18 and 28% to apply on services including telecom, insurance, hotels and restaurants.

ALSO READ: GST: India's new tax leaves service providers worried 

ALSO READ: GST rates finalised: A complete guide on products getting cheaper or expensive from July 1