New Delhi: As the government mulls allowing Kingfisher Airlines to import ATF directly, oil companies have opposed the move saying the proposal was "bad economics" for the beleaguered airline in view of high taxes and handling cost.
In a detailed response to the application made by Kingfisher to import aviation turbine fuel (ATF) directly, oil firms stated that India is surplus in jet fuel and exports half of its production annually, official sources said.
Allowing direct import of ATF may lead to avoidable simultaneous import/export of ATF and undue burden on port infrastructure in the country, the oil firms said.
Kingfisher believes that by importing ATF directly, it can make substantial savings by not having to pay sales tax (which varies between 4 to 30 per cent from state to state).
Oil firms however say the airline would have to pay 12.83 per cent duty on the imported ATF (additional customs duty or CVD of 8.24 per cent plus a 3 per cent education cess on top of it and an additional 4 per cent special CVD or SAD).
Against this, Kingfisher presently pays only 8.24 per cent excise duty on jet fuel purchases made from oil firms.
15/01/12 PTI/Times of India
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