Monday, August 07, 2006

Proposal to impose cess on air travel rejected

New Delhi: The civil aviation ministry's proposal to impose a cess on air travel to raise funds to build airports has not found favour with North Block, which has asked the ministry to continue with the present system of cross subsidisation.
“Imposing a new cess does not make sound economic sense. The system to cross subsidise for unviable routes is valid and should continue,” a finance ministry official said.
Officials said North Block had, in its comments on the draft aviation policy, pointed out that the unremunerative airports should be revived through the public-private partnership route and any gaps in funding could be met through the government's viability gap funding project.
The civil aviation ministry proposed that every international passenger be taxed Rs 500 for each trip and domestic passengers be taxed Rs 250 per trip.
07/08/06 Monica Gupta & Bipin Chandran/Business Standard
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