In line with the decisions made during the 54th GST Council Meeting on September 9, 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 07/2024 – Central Tax (Rate). This notification introduces a reduced GST rate of 5% for the transport of passengers by helicopters on a seat-sharing basis. This reduced rate is aimed at making helicopter travel more affordable and accessible for passengers utilizing this mode of transport.
The notification also clarifies that charter helicopter services will continue to attract the standard 18% GST rate. Moreover, for the past periods, the GST will be regularized on an ‘as is where is’ basis.
Key Changes Introduced by Notification No. 07/2024
The notification makes amendments to the existing Notification No. 11/2017 – Central Tax (Rate), dated June 28, 2017, by introducing a new entry under Serial No. 8 that covers helicopter transportation on a seat-share basis.
Reduced GST Rate for Helicopter Transport (Seat Sharing)
The updated entry in the table under Serial No. 8 introduces the 5% GST rate for helicopter transportation when passengers share seats, with certain conditions on input tax credit (ITC).
| Serial No. | Service Heading | Description of Service | GST Rate | Conditions |
|---|---|---|---|---|
| 8 (ivb) | Heading 9981 | Transportation of passengers by air, in a helicopter, on a seat share basis (with or without accompanied baggage). | 2.5% (Central Tax), 5% total | Provided that input tax credit (ITC) on goods used in supplying the service is not availed. |
This rate applies only when the helicopter is operated on a seat-sharing basis, where passengers book individual seats rather than chartering the entire helicopter.
Clarification on Charter Helicopter Services
The GST rate for charter services (where the entire helicopter is booked by a single entity) remains unchanged at 18%. This ensures a distinction between commercial seat-sharing services and private charters.
Objective of the Amendment
The key objectives of this amendment are:
- Promote Helicopter Travel: By introducing a reduced GST rate of 5% for seat-share helicopter services, the government aims to encourage more affordable air travel, particularly in areas where helicopters are a key mode of transport.
- Simplify Tax Compliance for Operators: By maintaining the 18% rate for charter services and creating a separate lower rate for seat-sharing, the notification simplifies the tax structure for helicopter operators, ensuring clarity on how services should be taxed.
- Regularize Past GST Demands: For helicopter transportation services provided in the past, the notification ensures that any outstanding GST is regularized on an ‘as is where is’ basis, ensuring there are no retrospective tax changes.
Effective Date
The provisions of Notification No. 07/2024 – Central Tax (Rate) will come into effect from October 10, 2024. From this date, all helicopter transport services provided on a seat-sharing basis will be subject to a 5% GST rate (split as 2.5% Central GST and 2.5% State GST).
Input Tax Credit (ITC) Restrictions
The notification includes a condition for helicopter operators providing seat-sharing services: they cannot claim input tax credit (ITC) on goods used in the supply of these services. This condition is designed to prevent double benefits and ensure the GST structure remains fair for both operators and the government.
| Type of Helicopter Service | GST Rate | ITC Eligibility |
|---|---|---|
| Seat-sharing basis (public transport) | 5% (2.5% CGST + 2.5% SGST) | No ITC on goods used for the service |
| Charter services | 18% | Full ITC eligibility |
Similar Notifications under IGST and UTGST Acts
In addition to the Central Goods and Services Tax (CGST) Act, similar notifications have been issued under the:
- Integrated Goods and Services Tax Act, 2017 (IGST Act), and
- Union Territory Goods and Services Tax Act, 2017 (UTGST Act).
This ensures a uniform application of the new GST rate for helicopter transportation across all states and union territories.
The introduction of Notification No. 07/2024 – Central Tax (Rate) brings much-needed clarity and relief to the helicopter transport sector. The reduced GST rate of 5% for seat-sharing services will make helicopter travel more accessible to the public, while the existing 18% rate for charter services remains unchanged. The regularization of past GST demands ensures there are no complications for services provided before the notification date.
Passengers and operators should review these changes to understand the new tax implications and ensure compliance starting from October 10, 2024.
This article provides a comprehensive overview of Notification No. 07/2024 and explains its impact on helicopter transportation services, highlighting the reduced GST rate for seat-sharing services and the tax implications for charter services.
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