MUMBAI: Airlines are fearing that their costs will rise because of the goods and services tax ( GST ), leading to higher ticket prices which will have an impact on cash flow.The Rajya Sabha on Wednesday passed the constitution amendment for the bill, which will usher in the single-biggest tax overhaul the country has seen since Independence, replacing various tax structures and unifying the country as one common market.Senior executives and industry experts, however, told ET that there’s likely to be a two-pronged negative impact on air travel: GST on tickets will be higher than the service tax they currently pay; jet fuel is kept outside the ambit of GST which means airlines will not be able to claim credit on the tax paid on the fuel."While GST is going to be extremely helpful to the manufacturing sector, there are certain difficulties in store for the services sector, including airlines," said the finance chief of an Indian carrier who spoke on the condition of anonymity.Currently, an airline needs to pay 6% service tax on economy class tickets and 9% on business class, which is transferred to the customer."A normal service provider would pay 15.5%, but airlines get a 60% relaxation on economy class tickets and 40% on business class, hence they have to pay 6%-9%. While the government hasn't yet specified taxes for specific industries, the normal GST is supposed to be at 17%-19%; on some 'demeritted' goods such as luxury cars it will be 40% while on some concessional goods and services, it will be 12%. Airlines might come under the 17%-19% bracket (instead of 6%-9% now), which will lead to higher ticket prices," said Anita Rastogi, partner, indirect taxes at PricewaterhouseCoopers India."An instance of over 15% would mean ticket prices will go up by Rs 400 or more, which is certainly not negligible," said Samyukth Sridharan, chief operating officer at travel portal Cleartrip "The government will need to make an exception for the airline sector as the current service tax ranges from 5.6% to 9% of the base fare, which is considerably less than the GST rate that is being spoken about, of 15-18%,” said Sharat Dhall, president of travel portal Yatra.The other impact may be on aviation turbine fuel. Currently, airlines can claim what is called a cenvatcredit on the central excise duty for fuel. They will lose that in the GST regime as petroleum products, including ATF, are outside the purview of GST."What happens now is that if an airline pays 14% tax on ATF, it can claim it as credit while paying the service tax on tickets. That is the central excise tax on ATF being set off against the service tax paid on tickets. In simpler terms, airlines can claim the money. But now with service tax being replaced by GST and ATF outside its purview, one can't be set off against the other," said Rastogi.There will be complaince costs too. "Currently, there is a centralised registration system for us, which means I can register where my corporate office is set up and have operations across the country. Now, we will have to register in each state which will multiply paperwork by several times," said the airline executive. This will also impact freighter airlines."Currently all freighter airlines are required to register under the Service Tax Act in any one state. The returns are filed twice a year. GST proposes monthly returns and if network industries like Express Delivery Services which are present all over the country are asked to register in all the states, then the compliance requirements for Express Industry would increase substantially.“Over a thousand GST tax returns would need to be filed as against two at present, leading to huge amount of compliance requirements and oversight from multiple tax administrators. There will also be input credit blockages leading to price increases due to non-availability of credit in the absence of single registration for network industries,” said Vijay Kumar, chief operator office of lobbying body Express Industry Council of India.