TheBankTodayTheBankTodayTheBankToday
Notification Show More
Font ResizerAa
  • Home
  • Banking
  • SBI
  • ATM Card
  • NEFT/UPI
  • Central Bank
  • Important
Reading: GST on Premium Air Travel Increased to 18%
Share
Font ResizerAa
TheBankTodayTheBankToday
  • Home
  • Banking
  • SBI
  • ATM Card
  • NEFT/UPI
  • Central Bank
  • Important
Search
  • Home
  • Banking
  • SBI
  • ATM Card
  • NEFT/UPI
  • Central Bank
  • Important
Have an existing account? Sign In
Follow US

Home » GST

GST Logo result
GST

GST on Premium Air Travel Increased to 18%

Takendra Verma
Last updated: 09/09/2025 5:59 PM
Takendra Verma
Published: 09/09/2025
Share
SHARE

The Goods and Services Tax (GST) Council has raised GST on premium air travel—including premium economy, business, and first class—from 12% to 18%.

Contents
When Will the New Rates Apply?Airlines’ ConcernsAviation Industry’s Response

This means tickets in these classes will become more expensive. GST on economy class tickets will remain 5%, keeping travel affordable for regular passengers.

When Will the New Rates Apply?

The new GST rates will take effect from 22 September 2025.

If you book and pay before 22 September, the old 12% GST will apply, even if your travel date is later.

If you book after 22 September, you will have to pay 18% GST.

Airlines’ Concerns

Airlines and travel agents are worried about the increase. They say the Indian aviation market is already in a sensitive phase.

Ajay Prakash, former president of the Travel Agents Federation of India (TAFI), said:

“Increasing GST for higher class passengers will directly increase airfares across all classes. While the government aims to boost aviation with bigger aircraft, higher GST may discourage people from booking above economy class.”

Jitin Makkar, senior vice president at ICRA Ltd, added that this additional tax will be passed on to consumers.

Aviation Industry’s Response

The International Air Transport Association (IATA) called the decision “disappointing.” Sheldon He, IATA’s Asia Pacific Regional Vice President, explained:

The tax on premium travel was 8.6% in 2017 and has now risen to 18%.

This increase is against the efforts of Indian carriers who are investing in better travel experiences in premium classes.

IATA represents about 300 airlines, covering nearly 80% of global air traffic.

He added that taxing premium passengers is harmful because these travelers often bring extra profits on specific routes.

IATA estimates that in 2025, Asia-Pacific airlines will earn only $2.60 per passenger, making higher taxes on premium travel a negative move.

An airline insider, who wished to remain anonymous, said the increase is not revolutionary, but it forces airlines to rethink budgets and booking strategies.

A former airline official shared similar views:

India now has two major airlines in the premium segment:

Air India, trying to regain passenger trust but losing ₹5,000 crore due to Pakistan closing its airspace.

IndiGo, which recently entered the premium segment and launched its business class product.

You Might Also Like

Big Changes Coming to UPI Transactions
18% GST Now applies to All used Cars and Electric Vehicles
5% GST Recommended for Home Insecticides
GST Registration Now Needs Biometric Aadhaar Verification
Input Tax Credit Relief Likely under GST (Full Details)
Share This Article
Facebook Email Print
Leave a Comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Difference Between NEFT and RTGS

Get Banking Updates

Important banking and money updates, delivered without the clutter.
Thank you! Please check your inbox to confirm your subscription.
Popular Updates
SBI Asha Scholarship
SBI Asha Scholarship 2023: विद्यार्थियों को मिल रही 5 लाख की स्कॉलरशिप
31/07/2023
fd
RBI Changes FD Interest Rate Rules From October 1
22/09/2026
How to register YONO SBI
How to register YONO SBI in Just 5 minutes
11/05/2023
check balance from SBI ATM
How to check Balance from SBI ATM?
30/07/2023
How to check Balance in SBI
How to check Balance in SBI in 2023?
18/02/2023

Tags

  • Central Bank Of India
  • Pan Card
  • register mobile number
  • pan card new rule
  • Banking Service
  • HDFC
  • SBI Personal Loan
  • Net Banking
  • Activate Net Banking
  • What is Bank?

TheBankToday

TheBankToday publishes practical banking, personal-finance and financial-news explainers to help readers understand important updates and services.
Quick Links
  • About
  • Contact Us
  • Disclaimer
  • Join Us
  • T&C
  • Privacy Policy
  • Customize Interests
Important Links
  • Advertise With Us
  • Advertising Policy
  • Cookie Policy
  • Corrections Policy
  • Editorial Policy
  • Fact-Checking Policy
  • Grievance Redressal

Subscribe Us

Subscribe to our newsletter to get our newest articles instantly!

Thank you! Please check your inbox to confirm your subscription.
© 2026 TheBankToday. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?