GST Impact on Air Travel: Do You Have to Pay Extra GST If Your Travel Date Is After September 22, 2025?
The Goods and Services Tax (GST) Council of India has introduced changes affecting the taxation of air travel starting September 22, 2025. These changes have important implications for travelers booking their flights, especially for premium-class tickets. Here’s a clear breakdown of what travelers need to know about GST on air travel post-September 22, 2025.
What’s Changing in GST on Air Travel?
Currently, air travel in India is taxed at two different GST rates:
- Economy Class tickets attract a 5% GST.
- Premium Economy, Business, and First Class tickets attract 12% GST.
Starting September 22, 2025, the GST Council has decided to simplify the GST slabs for air travel, moving to a two-tier system:
- Economy Class tickets will continue to attract 5% GST, keeping travel affordable for the majority of flyers.
- However, the GST on Premium Economy, Business, and First Class tickets will increase from 12% to 18%.
This means if you book premium or business class tickets on or after September 22, 2025, your ticket price will include this higher 18% GST, potentially increasing your travel costs significantly.
Do You Have to Pay Extra GST If Your Travel Date Is After September 22, 2025?
The key factor determining the GST rate is the date of booking and payment, not the travel date. Experts clarify that:
- If you book and pay for your ticket before September 22, 2025, the old GST rate (5% for economy, 12% for premium) applies, even if you travel after this date.
- If you book your ticket on or after September 22, 2025, the ticket price will include the revised GST rate (5% economy, 18% premium classes).
Therefore, for travelers who have already booked and paid before the GST change date, no additional GST will be charged later for travel occurring after September 22.
What About Cancelled Flight Bookings?
When a ticket is cancelled, the airline issues a credit note based on the GST rate that was applicable at the time of booking. For example:
- If the ticket was booked with 12% GST and then cancelled after the rate increase, the refund will correspond to the original 12% GST paid.
- GST law permits a full refund of GST, subject to any cancellation charges deducted by the airline.
Impact on Different Travelers
- Economy Class Travelers: Fare and GST rates remain stable at 5%, ensuring air travel remains accessible to budget-conscious passengers.
- Premium Travelers: Those flying business, first class, or premium economy will face higher GST charges after September 22, increasing the overall ticket cost.
- Corporate Travelers: Businesses registered for GST can claim input tax credit on the increased GST, reducing the effective cost impact.
- Frequent Flyers & Loyalty Points: GST will also apply on redeemed tickets, so airline miles won’t bypass the revised tax structure.
Summary
Class of Travel GST Rate Before Sept 22, 2025GST Rate On or After Sept 22, 2025Economy Class5%5%Premium Economy/Business/First Class12%18%
Tips for Travelers
- Plan your premium class bookings before September 22, 2025 to save on GST.
- Consider economy class for more affordable travel without GST hike.
- Stay updated with the GST portal and airline communications for refund and cancellation guidelines.
- Businesses should consult tax advisors regarding input tax credit claims.
Conclusion
GST changes effective September 22, 2025, mark a significant revision in air travel taxation in India. While economy class ticket holders won’t see a rise in GST, premium travelers will pay more at the ticket counter. Knowing when you book your ticket and understanding the GST slab applicable can help you manage your travel budget better. Whether flying for business or leisure, staying informed about tax changes is crucial for smart travel planning.