Huge disappointment

For the aviation industry that wanted to take wings, this year’s budget has come as a “huge disappointment”
All the demands put forth by the airline operators — reduction in the duty on aviation turbine fuel besides including it in the notified subject list and continuation of withholding tax on lease and rentals of aircraft — have drawn a blank. Most of the airline operators choose to just ‘not react’ to the budget.
According to Jeh Wadia, Managing Director, GoAir, “Had the ATF taxes been lowered and exemption of withholding tax on lease and rentals of aircraft been extended beyond March 31, 2007, it surely would have been healthier for the industry, with additional benefits in the form of even further lower fares being passed on to our passengers.
Nevertheless, the Sales Tax on fuel — which is now a declared good — for smaller aircraft weighing less than 40,000 kg will only benefit a very small percentage of airline operators.
Chidambaram has instead proposed a three per cent Customs Duty on aircraft and spare parts besides 16 per cent countervailing duty and four per cent special additional duty for importing aircraft.
Non-scheduled operators have not much reason to rejoice, feels non-scheduled operator Global Vectra Helicorp Ltd’s Chairman Lt. Gen. (retd) SJS Saighal. “The budget shows rather subdued pertinence to the aviation industry, which also touches helicopter oil and gas logistics industry”
Patting the back of the airline operators with small aircraft fleet, Chidambaram has put the ATF sold to all small aircraft with a maximum takeoff mass of less than 40,000 kg operated by scheduled airlines under Section 14 of the Central Sales Tax Act.
28/02/07 Manisha Singhal/Daily News & Analysis

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Categories: General Aviation Mar 2007