IATA tells Indian govt to stop taxing international air tickets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Calling attention to India’s practice of taxing international tickets, the International Air Transport Association (IATA) called for governments to facilitate the growth of global connectivity by avoiding creeping re-regulation and maintaining the integrity of global standards.

“India taxes international tickets in contravention of ICAO (International Civil Aviation Organization) resolutions,” the airline group said on Monday.

India helped develop ICAO resolutions prohibiting tax on international tickets, IATA’s Director General and Chief Executive Officer Alexandre de Juniac said adding that it is unacceptable that global standards are being ignored by the very governments that created them.

Taxing international tickets is against rules of ICAO, a specialised body of the United Nations.

Yet it persists in taxing international travel, de Juniac said, apparently referring to the imposition of Goods and Services Tax (GST) and enhancement of its rates on international air tickets, especially business class.

The Indian government had announced the implementation of GST from July 1, 2017. The tax covers airline products and services including tickets, ancillary, change, refund and other products and fees.

“Smarter regulation needs to counter the trend of creeping re-regulation. Global standards must be maintained by the states that agreed them,” said de Juniac.

De Juniac was presenting a report on the air transport industry at the opening session of the 74th IATA Annual General Meeting and World Air Transport Summit, which began on Monday.

The IATA, which represents about 280 carriers, said the industry is expected to post a $33.8 billion profit this year, 12% below a previous forecast of $38.4 billion.

But passenger yields, a proxy for air fares, are expected to rise by 3.2% this year, the first annual gain since 2011 as a stronger global economy drives growth in demand, IATA said.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow