In order to analyze the impact of Goods and Services Tax(GST) on the aviation industry, the government has exempted the import of the aircraft, aircraft engines and its parts which were procured on the lease.
The aviation industry has asked for the relief from the government as it was facing a dual levy of 5% at the time of import and another 5% at the time of payment of lease rent, i.e. in total they were paying 10% extra amount to the government. Several times civil aviation ministry had raised concerns before the revenue department but there was no response from the another side.
On Sunday, the finance ministry said that the airlines would not have to pay GST on the import of aircraft and its parts if GST was paid on their lease.
Besides, airlines are awaiting a formal clarification on several other areas of concerns such as input tax credit not being available for economy class tickets and the movement of spares from one part of the country to another.