Centre urges states to cut jet fuel tax to 12.5%

New Delhi: The Ministry of Civil Aviation has made a plea to the state finance ministers to reduce the sales tax on aviation turbine fuel (ATF) to 12.5 per cent. Currently, states levy a sales tax ranging between 20 per cent and 30 per cent on jet fuel. The ministry had earlier demanded that the tax be reduced to 4 per cent.
Presentations regarding sales tax cut were made by a senior official of the civil aviation ministry and Air India CMD Raghu Menon in a meeting with the Empowered Committee of State Finance Ministers held in Kerala on Monday.
If agreed to, airlines should be able to save around 5 per cent of their total operating costs. However, the benefit will be higher in certain locations which operate greater air traffic.
07/05/08 Prashant K Sahu & Anirban Chowdhury/Business Standard

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Categories: Indian Aviation- In General May 2008