Levying GST on international freight is likely to make air cargo "non-competitive", an industry body said today.
Freighters were not liable to pay any tax under the service tax regime, while now they have to pay 18 per cent GST.
"Subjecting international freight at 18 per cent GST is totally unfair as it will stifle the growth of air cargo.
"Why would the Government of India want Indian exporters to pay extra 18 per cent GST on freight and make our goods non-competitive in international market," PHD Chamber of Commerce and Industry said in a release.
The release was issued after an Air Cargo Summit organised by it here today.
PHD Civil Aviation Committee's co-chairman Vipin Vohra said air cargo service providers cannot claim input tax credit for freight from overseas paid for in foreign currency whereas exporters can.
"This has led to a lot of confusion," Vohra, who is chairman of Continental Carriers, told PTI.
He also said the industry has made several representations to the ministries of civil aviation and finance on the issue but is yet to get any clarification.
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