The Government of India has confirmed that an 18% GST is applicable on User Development Fees (UDF) collected from airline passengers. This clarification was provided by the Minister of State for Finance, Shri Pankaj Chaudhary, in response to an unstarred question raised in the Lok Sabha.
The question, posed by Member of Parliament Shri Matheswaran V S, sought details on whether GST has been fixed on UDF charges levied by airline operators since 2017. In reply, the Minister stated that GST rates and exemptions are determined by the GST Council, a constitutional body comprising representatives from both the Union and State/UT governments.
According to the Minister, "GST at the rate of 18% is applicable on the User Development Fee (UDF), which is collected by the airline operator as an agent of the airport operator."
User Development Fees are charges levied on departing passengers at certain airports to fund infrastructure development. These fees are usually fixed by airport operators with regulatory approval and collected by airlines at the time of ticket booking.
The clarification is expected to bring transparency and uniformity in the tax treatment of UDF across the country and ensure proper compliance among airline operators.
This statement reinforces the consistent application of GST rules to the aviation sector and may have implications for ticket pricing structures and consumer awareness regarding tax components.
Official copy of the notification has been attached
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