States refuse to cut tax on jet fuel

New Delhi: The aviation ministry and airlines may be pleading with states to lower sales tax on aviation turbine fuel (ATF) and again make flying affordable for people, but many states are not seeing any reason to do so.
On Thursday, Delhi CM Sheila Dikshit told TOI that there was no plan to reduce sales tax on ATF "as of now". Ironically, policy makers are not believing the fact that aviation industry is in a financial mess, considering the great growth story of this sector in recent times.
So far only Kerala, Andhra and Rajasthan have reduced sales tax on ATF to 4%. Maharashtra has also reduced this levy, but not for Mumbai and Pune, which makes the move virtually ineffective. Delhi levies 20% sales tax on ATF and Mumbai is higher at 25%. But a worried aviation minister Praful Patel said the price of ATF has reached a point where "something drastic" needs to be done.
The latest aviation turbine fuel hike on Wednesday saw airlines hiking fuel cess to Rs 1950 and Rs 2,350 for short and medium sectors, respectively.
The civil aviation ministry is now worried at the prospect of growth slowing down as low cost flying is becoming a thing of past.
02/05/08 Saurabh Sinha/Times of India

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General May 2008