“Given the price sensitivity of Indian passengers, this could have a significant negative impact on demand. The implementation of GST may also result in higher upfront costs for aircraft and leases, spares and parts, and distribution costs, increasing cash flow requirements, although airlines will receive input tax credits later,” it added.
The government is pushing for a new tax regime this year. The report also pitched for an “urgent review” of the country’s civil aviation policy, warning that it could “prove to be a hindrance” to the development of the sector.
The India Aviation Outlook 2017-18 report said that “design flaws” in the policy, particularly with respect to regional connectivity, ground handling and bilateral policy, mean that it will be “difficult to implement in practice”. It could “inadvertently act as an obstacle” to achieving desired objectives, the report warned. Nikita Zadorov Womens JerseyShare This