The Civil Aviation Ministry has formally asked the Finance Ministry to bring ATF under the ambit of GST at an applicable rate not higher than 12% with full input tax credit, as per a submission made by the Civil Aviation Ministry before a parliamentary standing committee.
“The issue of inclusion of ATF under GST has been a long standing issue and requires final resolution by the GST Council,” the committee has noted in its report which was tabled in Parliament on Friday. This was after the Secretary, Ministry of Civil Aviation apprised the Committee that Ministry has taken up the proposal with the Ministry of Finance to bring ATF under GST for “coherence and simplicity in the tax regime” and that the matter is pending with the GST Council.
The Civil Aviation Ministry in its written note to the committee said the proposal is that applicable GST rate on ATF may be no higher than 12% with full input tax credit. “Output tax on sale of tickets both on business and economy air passenger transport services may be levied at a uniform rate of 12%. Output tax on air cargo transport, and ancillary services such as Catering, Premium Services and Services on Add-ons may be levied at 12%. Airlines may be allowed full input tax credit for GST paid on all goods and services,” the note said on the proposals.
The Ministry added that states have been requested “to provide full support” for bringing ATF within the GST’s ambit at the earliest during the deliberations on the matter in the GST Council, and in the interregnum to reduce the VAT/Sales Tax on ATF at their airports.