GST benefits: Companies need to provide information to airlines for business class tickets

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People travelling for business purposes on business class air tickets are now required to submit details about their companies to avail tax benefits under the GST regime. 

The Goods and Services Tax (GST) framework, which came into effect from July 1, provides for certain input tax credit only on business class tickets and there is no such provision on economy class fares. 

Air India, Jet Airways and Vistara — the three domestic carriers that offer business class seats — have already sent out communications to inform passengers that GSTIN details need to be submitted in order to avail the benefits.

The GST Identification Number is issued to entities that are registered under the new tax regime.

“It is now mandatory for guests travelling for business to add their company’s GST details at the time of booking. To ensure a seamless experience, we request that you inform your guests travelling for business to register on our portal and claim up to 12 per cent back on flights,” Jet Airways said in a communication. 

The GST rate on first class and higher class tickets is 12 per cent while the rate is 5 per cent on economy class tickets. The GST would also replace service tax, krishi kalyan cess and swachh bharat cess. 

After submission of the details, the airlines would generate GST invoice for the particular travel and that invoice can be used to claim the benefits.

“It is not compulsory to provide GST details. GST registration details for your business or company may be optionally provided if a customer wishes to claim input tax credit on the GST paid if travelling for business reasons,” Vistara said in a communication. 

According to Air India, all passengers requiring GST invoice for their tickets have to complete the one-time registration process on its website by entering the relevant details.

In its communication, Jet Airways also made it clear that “any bookings for leisure travel will not be entitled for GST benefits”.

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