New Delhi: The budget has failed to provide any substantial relief to the financially crippled aviation sector and has overlooked the tourism industry.
Airlines had expected finance minister P. Chidambaram to offer some relief to the sector by providing “declared goods” status to aviation turbine fuel (ATF) or jet fuel, which constitutes the major operating cost. Jet fuel will attract lower tax if it is treated as a declared good.
Airlines pay between 4 per cent and 25 per cent as taxes on jet fuel. The percentage varies from state to state.
“It’s been a disappointing budget for aviation. There were expectations of relief in ATF and MRO (maintenance, repair and overhaul) taxes and funding support for regional airports. All dashed, except for a minor correction in the duty-free period for import of spares and test equipment for MRO. The aviation sector will continue to struggle till fundamental policy changes in taxation are brought in,” said Amber Dubey, partner and head (aviation), KPMG in India.
The finance minister has proposed to exempt basic customs duty on the import of spare parts and testing equipment for maintainance and repair.
03/03/13 Karan Chowdhury/The Telegraph
