Airlines, ministry urge panel for action on high ATF taxes

New Delhi: All the airlines companies, backed by the civil aviation ministry, are planning to urge the empowered committee of state finance ministers to pursue states for reducing tax on aviation turbine fuel (ATF). Currently, sales tax imposed by states on ATF varies between 4% and 39%.
Airline companies want the states to rationalise the high tax on ATF that accounts for 40% of airlines’ total costs. Airline officials argue that apart from lowering costs, lower tax would result in lower fares and better connectivity. Aviation industry association Federation of Indian Airlines (FIA), along with civil aviation minister Praful Patel, would meet the committee — headed by West Bengal finance minister Asim Dasgupta — to seek rationalisation in taxes, sources said. While tax on ATF used in smaller aircraft has been reduced to 4% in Budget 2007, it has been kept at same level for bigger aircraft. Civil minister Praful Patel said on Tuesday he will convene a meeting with the empowered committee of state finance ministers to apprise it of the benefits of lowering taxes on ATF.
15/03/07 Sunny Verma/Economic Times

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Categories: General Aviation Mar 2007