The Ministry of Civil Aviation has asked the Ministry of Finance to postpone the rollout of the Goods and Services Tax (GST) from July 1 to September 1 as some domestic airlines, including national carrier Air India, have expressed their inability to switch to a new tax regime soon.
The Aviation Ministry told the Finance Ministry that full-service airlines, Jet Airways and Air India, rely on global distribution systems (GDS) software for booking tickets through travel agents and it would require key changes in the system to include GST.
The Finance Ministry had on Wednesday scotched all speculation about any shift in the GST implementation date and had asserted that the new indirect tax system would indeed be implemented from July 1.
In its letter to Mr. Adhia, the Aviation Ministry has recommended four changes in the GST regime that impact the industry.
The Aviation Ministry has also demanded a GST exemption on inter-state transfer of stocks so that movement of aircraft spares – not meant for resale purposes – from one location to the other can take place without attracting any additional cost. “The Indian Railways got a similar exemption on stock transfers in the recent GST Council meeting. In case an aircraft is grounded, the cost of repairing will go up since movement of aircraft spares from one state to another will attract GST,” the official said.