18% GST on international freight to make air-cargo non-competitive: PHDCCI

Service providers of air cargo cannot claim the input tax credit on international freight.

The Dollar Business Bureau

Imposing Goods and Services Tax (GST) on international freight is going to make India’s air cargo services "non-competitive", said industry body PHD Chamber of Commerce and Industry (PHDCCI) on Wednesday.

Earlier, under service tax regime, freighters were exempted to pay any tax, whereas now they have been levied with 18% GST.

“Putting 18% GST on international freight is totally unfair as this will impact the air cargo growth, said PHDCCI in a statement issued after an Air Cargo Summit, which is organised by the industry body on Wednesday in New Delhi.

“Why would the Government of India want Indian exporters to pay extra 18% GST on freight and make our goods non-competitive in international market,” the statement said.

Vipin Vohra, Co-Chairman, PHDCCI Civil Aviation Committee, said that service providers of air cargo cannot claim the input tax credit on international freight paid, in foreign currency while the exporters can.

Vohra, who is also the Chairman of Continental Carriers, told PTI, “This has led to a lot of confusion.”

He further said that the industry has made various representations to the Civil Aviation and Finance ministries regarding the issue, however, it is still to get any clarification from them.

 
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