PM meet to discuss high tax on ATF, liberal overseas permission

New Delhi : High tax on aviation turbine fuel (ATF) and allowing Indian carriers to fly liberally on international routes form two major issues airlines are planning to raise in their first such meeting with Prime Minister Manmohan Singh tomorrow.
The proposed conclave comes after the PM called all the heads of the country’s airlines for a discussion in the government’s bid to help cash-strapped carriers and resolve other industry issues. Among those slated to attend the talks are Jet Airways’ Naresh Goyal, InterGlobe Aviation’s Rahul Bhatia and Kingfisher Airlines’ Vijay Mallya.
Other matters that also could find place in the discussions are higher airport charges and allowing foreign airlines to buy stake in Indian carriers. “A major concern for us is the high taxes on jet fuel,” according to an executive of a full-service carrier. “That is one of the major reasons for our cost increase. This cost can only be controlled if the taxes on ATF are rationalised,” he told Business Standard.
The average tax on jet fuel in India — at 24 per cent -- is the world’s second highest, just next to Bangladesh (27 per cent). The airline companies have been demanding to bring ATF under capital goods category that will fix the taxes on ATF at 4 per cent. Recent increase in crude prices, also contributed by depreciation of rupee, has made the cost on fuel around half of their total cost, from two-fifth of the total cost a year earlier.
26/11/11 Business Standard

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Categories: Foreign Nov 2011, Indian Aviation- In General Nov 2011