Luxury travel is set to become pricer. The GST Council is increasing taxes on private jets, yachts and premium airfares. Aircraft used for personal purposes will incur a 40 per cent GST. Yachts will also be taxed at a rate of 40 per cent. Non-economy air tickets will attract an 18 per cent GST. Airlines are likely to pass on the increased costs to passengers.
Luxury flying and sailing will become markedly more expensive from September 22 with the GST Council raising levies on private aircraft, yachts and premium travel. Aircraft used for personal purposes, typically private jets and helicopters operated outside scheduled commercial services, were previously taxed at 28 per cent GST plus a 3 per cent Compensation Cess, resulting in an effective rate of 31 per cent. They will now fall under a flat 40 per cent GST slab. The shift eliminates the cess mechanism and significantly raises the cost of acquisition and impact for charter operators and ultra-high-net-worth individuals.
Yachts and other pleasure vessels face the same treatment, moving from 28 per cent plus 3 per cent cess to 40 per cent, closing a long-standing gap in taxation of luxury assets. Premium air travel is also being priced higher. Non-economy class tickets, which were previously taxed at 12 per cent, will now be taxed at 18 per cent GST. Airlines are expected to pass on the additional levy to passengers, making business and first-class fares more expensive at a time when premium demand has been firm.
The Council's message is unambiguous: discretionary flying and sailing will now attract a sharper tax burden, even as drone simulators and freight services shift to lower GST slabs.
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