‘5% GST will result in higher working capital needs: Report


Hyderabad: With the indirect cost on rental services of aircraft increasing from 15% to 18%, it will impose a higher burden on the end consumer, a report prepared by Deloitte Haskins & Sells for the Business Aircraft Operators Association (BAOA) has said.

The report was released here on Wednesday at a day-long seminar BizAVIndia 2018 on the theme `Emerging opportunities for air connectivity in India: Navigating the future of business and general aviation’ organized by BAOA.

 According to the report, the 5% GST on import of aircraft for purchase as well as lease would also result in an increase in the working capital requirements. The report also said the GST law has not defined terms such as “economy class” and “other than economy class”. While the economy class attracts 5% GST, the other than economy attracts 12%, which is why there was a need to provide a clear distinction between the two cases under the GST law.

Pointing out that the business aviation sector has seen turbulent times, BAOA president Rohit Kapur said the business and general aviation (BA/GA) industry is finally seeing green shoots with the Indian government accelerating its vision to improve air connectivity and tourism in India.

“This priority focus holds tremendous promise for the BA/GA industry that includes helicopters, and will define the direction in which the industry will steer in times to come. “The BA industry has undergone a sea change over the past decade in India and has gained much recognition in the recent years. The utility of Business Aviation, as a productivity tool and a contributor to economic development, is becoming more evident and should serve as the prime rationale to put in place an appropriate framework enabling industry’s growth and its role in channelizing economic and social benefits throughout India”, said Kapur.

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