Clarification is needed from the Indian authorities on the implications of the new Goods and Services Tax (GST) scheme that came into force on 1 July.
The new scheme would see economy travel taxed at 5%, premium travel at 12% and air cargo at 18%.
One has to question the wisdom of taxing connectivity so heavily
It is unclear how ancillary purchases or journeys involving several classes would be taxed.
“We are still seeking clarification on significant information gaps,” said Amitabh Khosla, IATA’s Country Director, India. "And we are urging the government to follow global standards.
"Levying GST on cargo export services by air, for example, contradicts standard GST principles.
“And finally one has to question the wisdom of taxing connectivity so heavily. For a trading nation like India, it’s a self-imposed competitive handicap."