GST 2.0 Brings Costlier Air Travel, But No Extra Burden On Premium Train Tickets

New Delhi: The recent changes announced in the GST Council meeting on September 3, 2025, have introduced a simpler two-rate system—5 percent and 18 percent—for most goods and services. This is part of the government's plan under GST 2.0 to make the tax structure more efficient and easier to follow.

Premium Air Travel to Get Costlier

As a result of the changes, premium economy, business class, and first class air tickets will now become more expensive, as the GST has been increased from 12 percent to 18 percent on these categories. The economy class air tickets, however, remain unchanged at 5 percent GST. These revised rates will be effective from September 22, 2025, and are expected to raise travel costs for passengers choosing higher-end air services.

No GST Hike on AC Train Tickets

This hike has led to questions among frequent travelers about whether similar changes will apply to premium train travel, especially AC classes on Indian Railways.

However, there is good news for railway passengers. The government has decided not to increase GST on AC and premium train tickets. The current 5 percent GST rate on all AC classes—including 3AC, 2AC, 1AC, AC Chair Car, and Executive Chair Car—will stay the same even after the new rules come into effect.

This means train passengers opting for comfortable AC travel can breathe easy, as their ticket prices will not be impacted by GST 2.0.

New Rates Effective from September 22

Air travel in premium categories will now come with a higher tax burden, but train travel in AC coaches remains unaffected, making it a more budget-friendly option for many passengers post-September 22.