New GST on Flight Tickets in India: Rates, HSN Codes & Fare Breakdown

Whether you’re flying for business or leisure, your airline ticket includes more than just the base fare. One major component is Goods and Services Tax (GST), which varies based on travel class and flight type. In this blog, we’ll break down the gst on flight tickets, explain how rates differ between economy and business class, and what travelers and businesses need to know about  claiming Input Tax Credit (ITC) .

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New GST Rate on Air Travel in India

The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates by travel class (no compensation cess).

Travel Class New GST Rate
Economy Class 5%
Business Class 18%

This rate applies to both domestic and international flights departing from India. Airlines charge the GST as part of your ticket price and deposit it with the government.

Old GST Rate on Flight Tickets

(Old GST Rates – Applicable Until 21st September)

GST on air travel in India is based on the class of travel:

Travel Class Levied By
Economy Class 5%
Business Class 12%

This rate applies to both domestic and international flights departing from India. Airlines charge the GST as part of your ticket price and deposit it with the government.

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HSN Code for Air Travel Services?

Air travel services fall under  HSN Code 9964 , specifically:

Service Type HSN Code GST Rate
Air transport of passengers 996422 5% (economy) / 12% (business)
Charter flights or helicopter services 996423 18%

These codes help categorize the type of service for invoicing and  GST filing .

GSTRate on Flight Tickets in India

GST Calculation Example on Flight Tickets

Let’s say you book a one-way economy ticket for ₹4,000:

  • GST @5% = ₹200
  • Total Ticket Price = ₹4,200

Now let’s consider a business class ticket worth ₹15,000:

  • GST @12% = ₹1,800
  • Total Ticket Price = ₹16,800

So, the gst on flight ticket significantly affects higher-class fares.

Input Tax Credit (ITC) on Air Tickets

For Businesses:
  • ITC is not available on economy class tickets
  • ITC is allowed on business class tickets, provided:
  • The booking is in the company’s name
  • The airline issues a tax invoice with  GSTIN
  • The trip is for business purposes

This allows businesses to reduce their net GST liability.

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GST on International Flights

For international travel, GST is applicable only if:

  • The flight originates in India
  • The airline is registered under GST

In such cases:

  • Economy class – 5% GST
  • Business class – 12% GST

If the flight originates from outside India, no GST applies under the Indian tax laws.

GST on Ancillary Charges

Airlines also levy GST on additional services such as:

Service GST Rate
Extra baggage fees 18%
Seat selection charges 5% / 12% (based on class)
Lounge access 18%
On-board food (pre-booked) 5%

So even your seat upgrade or extra luggage can attract GST.

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Final Thoughts

Understanding the gst on flight tickets helps travelers decode their fare breakdown. While the 5% GST for economy class is relatively modest, business class travelers and companies should take note of the 12% rate and potential for ITC. Whether you’re flying within India or heading overseas, knowing how  GST (Goods and Services Tax)  works can help you optimize costs and stay compliant.

Madan Murari
Madan Murari
Chartered Accountant
MRN No.: 509164
City: Patna

Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!

Frequently Asked Questions

  • What is the GST rate on economy class tickets?
    5% GST is charged on economy class fares.
  • Do I pay GST on international flights?
    Yes, if the flight originates in India. GST is charged at 5% or 12% depending on the class.
  • Can I claim ITC on air travel for business?
    Only if you're flying business class and the ticket is booked under a GST-registered business account.
  • Is GST applicable on baggage fees and other add-ons?
    Yes, add-ons like baggage, food, and seat selection attract 5% to 18% GST.
  • How do I know if GST was applied to my ticket?
    Your airline ticket invoice will list the GST amount and applicable HSN code.
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