Companies need to provide info to airlines for business class tickets

The Goods and Services Tax (GST) framework, which came into effect from July 1, provides for certain input tax credit on air tickets.

Air India, Jet Airways and Vistara, among other airlines have 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 the 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.

A Jet Airways official said that any business house buying tickets will be entitled to GST credit if they furnish their GST registration number irrespective of whether it is a business class or an economy class. Those who buy tickets on an individual basis not having any GST registration number will not get the credits, the official added.

"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 Goods and Services Tax 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 Goods and Services Tax benefits".

Ruling out any price rise post Goods and Services Tax (GST), former Revenue Secretary Shaktikanta Das has said such apprehensions are "misplaced" and initial hiccups in its implementation will be sorted out in the next 2-3 months. Das also said that the Centre and states are well prepared for smooth implementation of the GST, which was launched on the midnight of June 30.

Asked if GST will result in spike in prices, Das said, "Not at all" and "it is misplaced" as people are looking at taxes from only one side.

People are looking at an increase in prices of goods/services on which taxes have been hiked. However, they are not seeing the input tax credit been made available to the industry, he said and urged people to look at the tax reform holistically.

The consumer durables industry is expecting only a marginal price revision despite the category being placed under the highest tax slab of 28 per cent under GST, as players look forward to the festive season in the coming months.

The festive season accounts up to 35 per cent of the consumer durables sales.

"In the short-to mid-term, I see the fundamentals remaining the same. Though consumer durables industry is being taxed at 28 per cent, which is slightly more than what the previous tax structure, I don't anticipate any major price increases in the coming months," BSH Household Appliances MD Gunjan Srivastava said. The tax rate for the sector was around 25-27 per cent, which has been hiked to 28 per cent under GST.

"I expect the prices to remain constant at least in the initial period before people understand what how much is the additional cost. But, that would take some time for people to accurately measure. We are also approaching the festival season, so the industry will like to moderate it," he added.

Godrej Appliances business head Kamal Nandi expects prices to go up by 1-2 per cent which could impact demand in the short-run, but expects it to pick up during the festive season.

"Home appliances have become a necessity now with evolving consumer lifestyle and a lower tax slab would have made appliances more affordable in a low-penetrated market.

"With 28 per cent tax under the GST, we expect the consumer price of home appliances to marginally go up by 1-2 per cent. This could have an impact on demand in the short- run," he said.

"Normal monsoons and the resultant boost to the agricultural economy and hike in allowances to government employees will propel demand during the forthcoming festive season," he added.