No specific excise on ATF either: Finmin

New Delhi: Yet another attempt by the civil aviation ministry to provide relief to airlines from the high jet fuel prices has failed. After refusing to include aviation turbine fuel (ATF) in the declared-goods list, the finance ministry has rejected the aviation ministry’s proposal to levy a specific excise duty on ATF. Currently, ATF attracts an 8% excise duty and the ad valorem duty means the actual levy goes up every time price of the commodity is hiked.
"The finance ministry has rejected our proposal to levy specific duty on ATF. The committee headed by the Cabinet secretary to look into the financial crisis being faced by the airlines would, however, recommend it as one of the measures to save the industry in its report to the prime minister," a civil aviation ministry official said.
According to industry analysts, the specific duty can soften net fuel price only when the base price is too high. In case of low base price — which is expected as crude price has fallen to $124 a barrel from $147 a barrel in the last few weeks — it may not have the desired affect.
On July 3, prime minister approved setting up of a committee to examine various issues relating to the financial crises being faced by domestic airlines.
28/07/08 Nirbhay Kumar/Economic Times

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Categories: Indian Aviation- In General Jul 2008