ComMin to FinMin: Ask state govts to cut sales tax on ATF

New Delhi: The Commerce Ministry has asked its finance counterpart to urge the state governments to reduce sales tax on jet fuel to help cash-strapped airlines.
Jet fuel constitutes almost half of an airline's operating costs in the country, compared to 20-25 percent globally, due to high taxes on aviation turbine fuel levied by different states ? ranging from 4 percent to 30 percent.
The airlines have been demanding reduction in sales taxes by the state government.
In a letter to Finance Secretary R S Gujral, Commerce Secretary S R Rao has asked him to intervene in the matter.
"The Commerce Ministry has asked its finance counterpart to take up the issue with respective state governments to bring down the sales tax on ATF. The move would hugely benefit domestic airlines, which are facing huge credit problem," an official said.
09/09/12 PTI/ZeeNews

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Categories: Indian Aviation- In General Sep 2012