Centre may pillion tax-cut drive

New Delhi: State governments on Monday asked the Centre to share at least half of the Rs 8,000-crore revenue loss they would incur on account of reducing duty on petrol, diesel and cooking gas this fiscal. State governments, which obliged the central government by reducing taxes on petro products, have limited power to generate resources, empowered group of state finance ministers on VAT chairman Asim Dasgupta said here.
The committee also asked the civil aviation ministry to give details of how prices of aviation turbine fuel (ATF) are fixed. Civil aviation minister Praful Patel last week made a strong case for giving ATF declared-good status in a meeting with prime minister Manmohan Singh and finance minister P Chidambaram. “We will discuss the issue at the panel’s next meeting in Srinagar during June 21-23, after getting full details of price fixation of ATF from the concerned ministry,” Mr Dasgupta said.
On account of the high jet fuel price, domestic airlines have been losing money and are heading towards a financial crisis. Twenty-four airlines across the world have gone bankrupt due to spiralling fuel prices. Domestic carriers, which are estimated to have lost Rs 4,000 crore in 2007, are expected to register an accumulated loss of Rs 8,000 crore in the current fiscal.
Jet fuel prices have increased 100% in the last year. ATF prices have gone up from Rs 21,000 per kilolitre in 2004 to more than Rs 70,000 now. Mr Patel last week said that urgent steps were need to bail out the aviation industry.
17/06/08 Economic Times

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Categories: Indian Aviation- In General Jun 2008