India GST and Customs Duty Changes: Key Updates and Impacts

India GST & Customs Duty, GST on Imports in India

The introduction of the Goods and Services Tax (GST) in India has reshaped the taxation landscape for imports. While GST has streamlined many indirect taxes, Basic Customs Duty (BCD) remains outside its scope and continues to be levied as per existing customs laws. This section explores the impact of GST on imports, including changes to duties and taxes.

India GST and Customs Duty

Customs Duty Changes After GST

Basic Customs Duty (BCD): BCD is not subsumed under GST and continues to be charged as per the Customs Act. For instance, a 10% BCD was introduced on mobile phones and specific electronic components, such as chargers, batteries, wired headphones, microphones, keypads, USB cables, and receivers, aligning with GST implementation.

Education Cess, Anti-dumping Duty, and Safeguard Duty: These duties remain unaffected by GST and are levied as per existing regulations to protect domestic industries and ensure fair trade practices.

Countervailing Duty (CVD) and Special Additional Duty (SAD): Previously levied on imports, CVD and SAD have been replaced by the Integrated Goods and Services Tax (IGST) under the GST regime, except in specific cases. IGST is applied to imports to ensure uniformity in taxation.

GST and Customs Duty on Gold

Before GST, the total tax on gold jewellery was approximately 12.2%, comprising 10% customs duty, 1% excise duty, and 1.2% VAT (varying by state, e.g., 1% in Rajasthan to 5% in Kerala). With GST, the excise duty and VAT components have been replaced by a 3% GST rate on gold, announced on June 3, resulting in a modest tax increase. However, the 10% BCD on gold remains, levied alongside GST.

Note: State-specific VAT rates and additional local taxes could increase the overall tax burden on gold jewellery in certain regions.

Impact of GST on Imports

GST has minimal impact on non-GST duties like BCD, Education Cess, Anti-dumping Duty, and Safeguard Duty, which continue to be levied as before. However, the replacement of CVD and SAD with IGST simplifies the tax structure for imports, ensuring a unified tax system. This change aligns with GST’s goal of creating a seamless tax framework across India.

Can we claim GST on flight tickets in India?

Navigating GST on Flight Tickets in India: What You Need to Know

As travelers, we're often on the lookout for ways to make our journeys more cost-effective. One question that frequently arises is whether we can claim Goods and Services Tax (GST) on flight tickets in India.

What Does Your Airline Ticket Really Cost: The Breakdown
The total price of a flight ticket comprises the base fare, fees, and taxes. Beyond the base fare, additional fees and taxes are included in the total amount, ensuring transparency and providing travelers with a comprehensive understanding of the cost associated with their journey.

Let's delve into this topic to understand the ins and outs of GST and its applicability to air travel.

Understanding GST:

Goods and Services Tax, commonly known as GST, is an indirect tax levied on the supply of goods and services. Introduced in India in 2017, GST replaced multiple indirect taxes to streamline the taxation system and promote ease of doing business.

GST on Flight Tickets:

When it comes to air travel, GST is applicable to the sale of flight tickets. The applicable GST rate on domestic and international flight tickets varies, with different rates for economy class, business class, and first class.

Can You Claim GST on Flight Tickets?

While GST is levied on the purchase of flight tickets, travelers typically cannot claim input tax credit (ITC) for the GST paid on these tickets. Input tax credit allows businesses to claim a credit for the GST they pay on their purchases, reducing their overall tax liability. However, since flight tickets are generally purchased for personal or non-business purposes, claiming ITC on them is not permissible.

What are the GST rates for international flights in India?

 Understanding the GST Rates for International Flight Tickets and Input Tax Credit: For travelers flying Economy class, a 5% GST rate applies to international travel. Meanwhile, Business and Premium Economy class passengers are subject to a 12% GST rate." 

Exceptions and Special Circumstances:

There are certain exceptions and special circumstances where GST on flight tickets may be eligible for input tax credit. For instance, if the flight tickets are purchased for business-related travel or by a company for its employees, input tax credit may be claimable, subject to compliance with GST regulations and documentation requirements.

In summary, while GST is applicable to the purchase of flight tickets in India, claiming input tax credit on these tickets is generally not permissible for individual travelers. However, businesses may be eligible to claim input tax credit in certain circumstances, such as for business-related travel expenses. It's essential to consult with a tax advisor or financial expert for personalized guidance regarding GST implications and compliance.

As you plan your travels and manage your finances, understanding the nuances of GST on flight tickets can help you make informed decisions and navigate the taxation landscape with confidence.

Indigo Refund 

In case of a missed flights/ no show, all statutory taxes and User Development Fee (UDF)/Airport Development Fee (ADF)/ Passenger Service Fee (PSF) will be refunded.

To claim No-Show taxes, please click on 'Edit Booking' and enter your booking reference number and email id.

Air India Ticket Refund