Flying Economy class will turn cheaper once the new Goods and Services tax (GST) comes into effect on July 1.

Post the implementation of GST, those opting for economy tickets will save 1% on their ticket cost as the new tax rate has been fixed at 5% as opposed to the existing 6% tax.

Flying business class will however entail a 3% rise in costs as air tickets in this class will turn dearer as the tax rates will go up to 12% from the existing 9%.

Aviation industry experts welcomed the move.

India CEO of Sydney-based aviation think tank Capa Centre of Aviation Kapil Kaul noted that it was earlier believed that a GST rate of 18% might be applied to air travel. "Hence the government's decision to levy only 5% on economy class fares and 12% on business class means that there will be minimal change from current levels" of 6% and 9% respectively. He noted that the affordability of fares in India "will continue which is positive for consumers".

Kaul further said the move indicated that the "government was sensitive to the potential impact of higher fares on the industry".

Yatra.com COO Sharat Dhall also hailed the decision. "Overall, this seems like a good move for the sector and should help the growth momentum continue. Economy airfare will get marginally cheaper which should drive continued passenger growth in the air market, while business class will see a moderate increase."