Civil aviation ministry asks states to cap sales tax on ATF 12.5%

New Delhi: Looking at the difficulties of the states to reduce the sales tax component in aviation turbine fuel (ATF), the ministry of civil aviation has decided to ease its demand to reduce the sales tax from 4% and instead asked the states to cap it at 12.5% across the country.
Representatives of the ministry of civil aviation including senior officials realising the strain on revenues of the state made a presentation to the empowered committee of state finance ministers in Kerala, earlier this month and asked them to review the amount of tax imposed on ATF.
“The airlines industry has asked for a uniform sales tax rate of 4% for ATF giving it a declared goods status. While supporting the cause of the industry, the ministry of civil aviation realises the revenue constraints of the state governments and requests the committee to consider an intermediate sales tax rate of 12.5% as an upper ceiling to be implemented by all the states,” the civil aviation ministry official said.
19/05/08 Shauvik Ghosh/Financial Express

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Categories: Indian Aviation- In General May 2008