Rajasthan slashes sales tax on aviation fuel to woo carriers

New Delhi: In a decision that could reduce costs for India’s airlines if other states copy it, Rajasthan has become the fourth state to slash sales tax on jet fuel to 4% from 28%.
Fuel accounts for over 40% of operating costs at airlines in India and the tax reduction is being hailed by carriers. Airline firms, whose flights touch Rajasthan, could immediately take advantage of reduced spending on fuel while buying aviation turbine fuel (ATF) in the state.
Jitender Bhargava, executive director of National Aviation Co. of India Ltd-run Air India said the Rajasthan move should be followed by other states as well. “Mumbai and Delhi have to reduce it. Airlines account for half their flights,” he said.
Civil aviation minister Praful Patel has said in the past that he will try and persuade state governments to help airlines by reducing taxes on fuel.
Rajasthan, in its latest budget announced on 9 July, said it was reducing taxes to woo airlines to the state. “To attract the airline services to Rajasthan, tax rate on ATF has been reduced from 28% to 4%,” the state government said.
The state has three main airports at Jaipur, Jodhpur and Udaipur run by Airports Authority of India.
13/07/09 Tarun Shukla/Livemint

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Categories: Indian Aviation- In General Jul 2009