Table of Contents
1. GST on airline ticket – What are the circumstances where air travel does not attract GST?
- No GST is levied on tickets if the airline embarks from or terminates in any of the following states,
- Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura
2. Regional connectivity schemes and viability gap funding
- In order to make air travel affordable, the central government has started a new scheme wherein it will establish airports in various cities under the regional connectivity airport scheme. The ticket rates are capped at Rs. 2,500 per hour of flight.
- In order to enable the airline operators to afford the low rates, the central government is providing a subsidy called as viability gap fund funding.
- GST law specifically exempts the subsidy in the form of viability gap funding received by the airline companies. Hence GST is not applicable on such funding.
3. What is a contract carriage?
A contract carriage means a motor vehicle which carries a passenger from one place to another either for hire or reward under a contract where the fare is paid for use of vehicle as a whole. Eg. Maxi cab or Omni bus
4. Are the services of transportation of passengers via contract carriages exempt from GST?
Yes, transport of passengers by contract carriages are exempt from GST provided they are non-air conditioned.
5. Are the services of transportation of goods via contract carriages exempt from GST?
- Contract carriages used for transporting passengers are only covered under this exemption.
- However, transportation of goods by road by any person except by a goods transportation agency (GTA) or a courier agency are exempt from GST. Hence if the person providing service using contract carriage for transporting goods is not registered as a GTA or a courier agency, then the service of transporting goods becomes non-taxable.
6. Circumstances where GST is levied on transportation of passengers by a non AC contract carriage?
- Contract carriages used for tourism or conducted tours.
- Even though radio taxis are typically considered to be a type of contract carriage, GST will be levied on transportation of passengers by radio taxis since the same is explicitly removed from the exemption.
7. What are radio taxis?
- With the advent of internet and smartphones, radio taxis have become obsolete, radio taxis are nothing but calling a radio despatcher and asking them to dispatch a taxi to our location. Even though such type of taxis is not common nowadays, they attract GST nevertheless.
- GST will be levied on transportation of passengers by radio taxis since the same is explicitly removed from the exemption.
8. What is a Stage Carriage?
Stage carriages are generally designed to carry more than 6 passengers for hire or for reward from one place to another where separate fares are paid by or for individual passengers, either for the whole journey or upto certain stages of the journey.
9. Are the services of transportation of passengers via a stage carriage exempt from GST?
Yes, services of transportation of passengers via a stage carriage are exempt from GST provided the stage carriage is non air-conditioned.
10. Are the services of a stage carriage used for tourism or ‘conducted tour’ exempt from GST?
It must be noted that services of a contract carriage for tourism purposes is explicitly excluded from the exemption notification thereby making it taxable. However, the same is not the case with stage carriages and hence services of a stage carriage for tourism purposes are exempt from GST provided the stage carriage is non air-conditioned.
11. What is the difference between a stage and a contract carriage?
The major differences are as follows,
| S. No | Stage Carriage | Contract Carriage |
|---|---|---|
| 1 | Designed to carry more than 6 passengers | No such restriction |
| 2 | No contract for use of vehicle as a whole | Contract entered into for use of vehicle as a whole |
| 3 | Fare or reward paid for or by individual persons | Fare or reward paid for the use of the vehicle as a whole |
| 4 | Can stop to pick up or drop people in the course of the journey. | Can stop to drop only those people that are a part of the contract and cannot pick up new individuals during the course of the journey. |
12. Should I pay GST on my bus ticket?
- Services of transportation of passengers via non air-conditioned stage carriages are exempt from GST.
- Public buses are considered to be stage carriages – hence a person need not pay any GST if he travels by a non-air-conditioned public bus. However, travel by air conditioned public buses will attract GST.
13. Should I pay GST on my railway ticket?
GST is not applicable for travel by non- AC coach, second class or sleeper class. However, GST will be applicable in the case of travel by First class or an air conditioned coach
14. Do travel by rope cars or cable cars attract GST?
Yes, travel by rope cars or cable cars are not covered by the exemption, hence GST is applicable
15. Are the services of transportation of passengers by way of inland waterways, taxable under GST?
Transportation of passengers by way of ferries or ships via inland waterways such as lakes or rivers are exempt from GST.
16. Are the services of transportation of passengers provided by a cruise ship taxable under GST?
Yes, the services provided by a cruise ship by way of transportation of passengers is taxable under GST.
17. Do we have to pay GST for auto rickshaw fares?
- Metered cabs or auto rickshaws were originally exempted from GST.
- As per a recent amendment, Auto-rickshaw services provided through e-commerce platforms will attract 5% GST with effect from 1st January, 2022. However, GST in such cases has to be paid by the e-commerce operator/aggregator and not the person availing the services or the person driving the auto rickshaw.
- However, such services provided through offline mode continue to be exempted
18. Applicability of GST on travel by a vessel between places located in India other than by inland waterways
Transportation of passengers, by way of a vessel between places located in India is not taxable under GST provided the same is not used predominantly for tourism purpose.
19. Will any taxes apart from GST collected from a passenger form a part of the taxable value of supply?
Yes, all taxes collected apart from GST will form part of the taxable value of supply for the purpose of levy of GST.
20. Is GST applicable on UDF and PSF charges collected by the airlines from the person booking a ticket?
Yes, GST is applicable on the User Development Fees (UDF) / Passenger Service Charges (PSF) which is collected as part of the passenger fare and remitted to concerned airport operators.