New Delhi, Sept. 5 -- The Goods and Services Tax Council has raised the levy on non-economy air travel from 12% to 18%, a move experts believe will drive up fares for passengers travelling in premium economy (PE), business and first class.

While the rate for economy travel stays unchanged to keep airfares affordable for mass travellers, the steeper GST on upper classes has triggered concern among airlines and online travel agents. Prior to the Council announcing the new tax regime on Wednesday, two major airlines requested for GST on all classes to be brought to 5%, three government officials confirmed to HT.

Former president of Travel Agents Federation of India (TAFI) Ajay Prakash said the new GST rate has come at a time when the India...