GST on Aviation Services in India (2026): Air Travel, Cargo, MRO & Charter Rates
Aviation is one of the more nuanced sectors under India’s Goods and Services Tax (GST). The rate you pay depends on whether you are buying an economy or business-class ticket, moving cargo, chartering an aircraft, or getting an aircraft maintained. This 2026 guide explains how GST applies across passenger air travel, air cargo, maintenance (MRO), and charter services, along with the SAC codes, input tax credit rules, and the treatment of international flights.
GST on passenger air travel
GST on air passenger transport is charged on the fare, and the rate depends on the class of travel:
- Economy class: 5% GST, with input tax credit (ITC) restricted to input services only.
- Business, first and premium class: 18% GST, with full ITC available.
The lower 5% rate keeps mass-market air travel affordable, while premium cabins are taxed at the standard rate. This distinction has continued through the 2025 GST rate rationalisation.
| Service | GST rate | SAC code |
|---|---|---|
| Economy class air travel | 5% | 9964 |
| Business / first / premium class | 18% | 9964 |
| Air cargo / freight transport | 18% | 9965 |
| Aircraft charter / rental (with operator) | 18% | 9966 |
| Aircraft MRO (maintenance, repair, overhaul) | 5% (with full ITC) | 9987 |
Place of supply and international flights
Place of supply rules decide whether and how GST applies, and they matter most for international travel:
- Domestic flights: The place of supply is the location where the passenger embarks, and GST (5% or 18%) applies normally.
- International flights – outbound (from India): Economy travel to a place outside India has historically enjoyed concessional or nil treatment on the international leg in specified cases, while premium cabins are taxed. The embarkation-based rule governs the position, so confirm the current notification for the route.
- International flights – inbound (to India): Where the embarkation is outside India, the transport is generally outside the Indian GST net.
Because international air transport treatment has specific conditions and exemptions, airlines apply GST based on the sector and embarkation point rather than a single blanket rate.
GST on air cargo and freight
Transport of goods by air (air cargo) is taxed at 18% for domestic movements, with ITC available to registered recipients. The export of goods by air has, in specified periods, been given relief, but businesses should verify the current position, as exemptions in this space have been time-bound and subject to change. For a manufacturer or trader moving goods, the 18% freight cost is usually creditable, so the net impact depends on your ITC position.
GST on aircraft maintenance (MRO)
Maintenance, Repair and Overhaul (MRO) services for aircraft are taxed at a concessional 5% with full input tax credit. This rate was deliberately reduced from 18% to make India a more competitive MRO hub and to stop Indian carriers sending aircraft abroad for servicing. For domestic MRO providers and airlines, the 5% rate with full ITC significantly lowers the effective cost of keeping aircraft airworthy.
GST on charter and aircraft rental
Chartering an aircraft, or renting one along with an operator and crew, is treated as a rental or transport service and generally attracts 18% GST. Business charters used for genuine business purposes allow the recipient to claim ITC, subject to the usual conditions. Where an aircraft is leased without an operator, the transaction may be classified differently, so the exact structure of the contract determines the rate and credit position.
Input tax credit in aviation
ITC is where aviation GST gets strategic:
- Economy tickets (5%): The airline can claim ITC on input services, but not on inputs such as spares, in this category. A business buying economy tickets for employees can generally claim ITC on the 5% GST if the travel is for business and the GSTIN is provided.
- Premium tickets (18%): Full ITC is available to the airline, and business travellers can claim credit on the 18% charged.
- Air cargo (18%): Fully creditable for registered businesses using the service for their operations.
- MRO (5% with full ITC): Airlines get full credit, keeping maintenance cost-efficient.
To claim any of these credits, the business must provide its GSTIN at the time of booking so that the invoice reflects it and the credit appears in GSTR-2B.
Compliance points for aviation businesses
- Ensure correct SAC classification on invoices, as rates differ across passenger, cargo, charter and MRO services.
- Capture the customer GSTIN for corporate bookings so they can claim ITC.
- Apply place-of-supply rules carefully for international sectors.
- Track time-bound exemptions on exports and international transport, which change through notifications.
If your business books significant corporate travel or operates in the aviation supply chain and you want to make sure your registration and ITC are optimised, our team can help you get your GST registration and compliance in order.
Frequently asked questions
What is the GST rate on flight tickets in India?
Economy class air travel is taxed at 5%, while business, first and premium class tickets are taxed at 18%. The rate is charged on the fare and applies to domestic travel, with special rules for international sectors.
Can a business claim ITC on employee flight tickets?
Yes. A registered business can claim input tax credit on GST charged on air tickets used for business travel, provided the company GSTIN is given at booking and the invoice reflects it. Both the 5% economy and 18% premium GST can be creditable.
Why is aircraft MRO taxed at only 5%?
The MRO rate was cut to 5% with full ITC to make India competitive as a maintenance hub and discourage airlines from servicing aircraft abroad. It lowers the effective maintenance cost for domestic operators.
Is GST charged on international flights from India?
It depends on the class and sector. Economy international travel has enjoyed concessional or nil treatment on the international leg in specified cases, while premium cabins are taxed. Airlines apply GST based on the embarkation point and route, so the exact treatment varies.
What GST rate applies to air cargo?
Domestic air cargo and freight transport is generally taxed at 18%, with input tax credit available to registered recipients. Export freight has at times had time-bound relief, so the current notification should be checked.
