Delhi govt wants to know if cut in ATF tax will boost revenue

New Delhi: The Delhi government has requested airlines to come up with a detailed note on how decrease in sales tax on aviation turbine fuel (ATF) will lead to higher offtake of fuel from Delhi airport, before taking any measure for reduction in taxes. Airlines have been repeatedly making representations to the state government asking for a reduction in sales tax on ATF from the current 20 per cent to 4 per cent.
The government wants to know how much will fuel tankering at Delhi airport increase if the sales tax was reduced, so that their (the Delhi government’s) revenues were not impacted, said an industry source. Currently, Delhi accounts for around 25 per cent of India’s total domestic traffic. Carriers do around 20 per cent of their total fuel tankering from Delhi airport.
Recently, the Andhra Pradesh and Kerala governments decreased sales tax on ATF to 4 per cent. Cut in sales tax on ATF to 4 per cent from 30 per cent (average sales tax levied across the country) across will reduce operating cost by 10 per cent.
10/04/08 Anirban Chowdhury/Business Standard

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Categories: Indian Aviation- In General Apr 2008