Govt Increases Excise Duty On Airline Tickets Up to Rs. 350,000 in Finance Bill

In a move that is set to impact the travel industry, the government has announced a significant increase in excise duty on airline tickets in the latest Finance Bill. The changes, which come into effect on July 1, 2024, will see excise duty on certain airline tickets skyrocket to as high as Rs. 350,000. In this blog post, we’ll delve into the details of the changes, explore the potential impact on travelers, and discuss what this means for the industry as a whole.

The Changes:

The excise duty on airline tickets has been increased across the board, with different rates applying to different classes of travel and destinations. The key changes are:

– Economy and economy plus tickets: Rs. 12,500
– Business and club class tickets to the Middle East and Africa: Rs. 105,000
– Business and club class tickets to the United States and Canada: Rs. 350,000
– Business and club class tickets to Europe: Rs. 210,000
– Business and club class tickets to New Zealand, Australia, China, Malaysia, and Indonesia: Rs. 210,000

Impact on Travelers:

The increase in excise duty is likely to have a significant impact on travelers, particularly those in the higher income brackets who are more likely to travel business or club class. The increased cost of tickets may lead some travelers to reconsider their travel plans or opt for lower-cost options. This could also impact the overall travel industry, as reduced demand for premium tickets could lead to reduced revenue for airlines.

Industry Implications:

The increase in excise duty is not only a blow to travelers but also to the airline industry. Airlines may need to reevaluate their pricing strategies and consider reducing costs in other areas to offset the increased excise duty. This could lead to reduced services or increased costs in other areas, such as food and beverages or baggage fees.

Conclusion:

The government’s decision to increase excise duty on airline tickets is a significant one that will have far-reaching implications for travelers and the airline industry. While the increased revenue generated from the excise duty may be a welcome boost to the government’s coffers, it is important to consider the potential impact on the industry and travelers. As the industry adapts to these changes, it remains to be seen how travelers will respond to the increased costs.

You might also like