Airlines pay fees to use a country’s airspace, also known as overflight fees. These fees are based on factors like the aircraft’s maximum take-off weight and the distance traveled. Countries essentially “rent” their airspace for passage.
Can airspace on “ rent” be included under the segment of supply of services by the Union Government for the purpose of RCM vide Entry No.5 of Notification No.13/2017-CTR dared 28/06/2017? And why?
Airspace Rental Fees: GST Experts Clarify Taxation Rules for International Airlines Under RCM Mechanism A discussion forum explores the legal and tax implications of airspace rental fees for international airlines. The analysis focuses on whether overflight fees charged by government authorities qualify for Reverse Charge Mechanism (RCM) under Indian GST laws. Experts conclude that airspace usage services are taxable, as they do not fall under airport-related service exemptions and represent a supply of services by government entities to business entities. (AI Summary)
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