Jet fuel to be kept out of GST net

New Delhi: Aviation turbine fuel (ATF) will be kept out of the Goods and Services Tax (GST) net even as the domestic airline industry is keen on its inclusion in the new tax system.
The Government is looking to introduce a dual GST system, which will be a milestone for theindirect tax reforms.
The Centre has now agreed with the States' proposal that ATF, crude, motor spirit and high speed diesel (HSD) be excluded from the proposed GST regime, the CBEC Member, Mr S. Dutt Majumder, said at an Amcham India event here on Monday.
This means that ATF will continue to be subjected to sales tax ranging from 4 to 30 percent even after the GST system is introduced.
Mitigation of cascading effect of taxation is one of the perceived benefits of GST to trade. However, with ATF's exclusion from GST, the cascading effect is unlikely to be mitigated. The input tax on ATF paid by the airlines will most likely be passed on to the passengers (without any set-off benefit), Mr Pratik Jain, Executive Director, Tax and Regulatory Services, KPMG, told Business Line. There are strong indications that commercial domestic air travel services will be subjected to GST.
18/01/10 Business Line

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

Categories: Indian Aviation- In General Jan 2010