Airlines likely to be slapped 12.5% ATF tax

Thiruvananthapuram: State Governments are likely to slap a common 12.5% tax on the ATF (aviation turbine fuel) drawn by airlines. This would mean ATF prices would rise at Cochin and Hyderabad airports, while it would come down at Mumbai and Delhi. A consensus on this has emerged as many states, who tried offering a lower tax rate, are annoyed that the tax benevolence was not reciprocated by air fare cuts in that sector.
It is understood that Asim Dasgupta, Chairman, Empowered Committee of States on VAT, is under tremendous pressure from airlines operators to advise paring down of the rates. Their plea is that ATF should be included in the list of declared goods, in view of the Rs 2,000-crore collective losses that the aviation industry is weathering. The centre has been pushing states to reduce ATF prices to make international airlines use India as a refuelling base and therefore a hub for their operations.
However, the mood voiced at the meeting of the panel was that States should stop competing among themselves for better aviation facilities and leave the airline operators to their fate, a State Minister, who attended at the meeting told FE.
08/05/08 M Sarita Varma/Financial Express

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Categories: Indian Aviation- In General Mar 2008