New Delhi/Hyderabad: Reduction in aviation turbine fuel tax is one measure that both Andhra Pradesh and Telangana Governments are weighing to propel growth in aviation and related sectors in their respective States.
The AP Government plans to reduce the tax on aviation turbine fuel lifted in the State from 16 per cent to 2 per cent, Ashok Gajapathi Raju, the Union Civil Aviation Minister, has said. Competitively, the Telangana Government has plans to bring it down to four per cent.
“I had a chat with the Andhra Pradesh Chief Minister, who mentioned that he would like to reduce it to 2 per cent. The Chhattisgarh Chief Minister mentioned that he had lowered it to 5 per cent. The national average is working out to be 28-29 per cent, which is high. If these things happen (lowering of tax on ATF), it will boost the aviation sector,” the Minister told Business Line.
Incidentally, this is not the first time that Naidu has resorted to lowering tax on ATF. Back in the late 1990’s as CM of undivided AP, he had lowered the tax to 4 per cent.
Industry players say that ATF constitutes between 40-50 per cent of the operating cost of domestic carriers. On an average, domestic ATF prices are about 70 per cent higher than international benchmarks, with the VAT on the fuel ranging from 4 per cent to 30 per cent in different States.
21/08/14 Ashwini Phadnis/Amit Mitra/Bhusiness Line
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The AP Government plans to reduce the tax on aviation turbine fuel lifted in the State from 16 per cent to 2 per cent, Ashok Gajapathi Raju, the Union Civil Aviation Minister, has said. Competitively, the Telangana Government has plans to bring it down to four per cent.
“I had a chat with the Andhra Pradesh Chief Minister, who mentioned that he would like to reduce it to 2 per cent. The Chhattisgarh Chief Minister mentioned that he had lowered it to 5 per cent. The national average is working out to be 28-29 per cent, which is high. If these things happen (lowering of tax on ATF), it will boost the aviation sector,” the Minister told Business Line.
Incidentally, this is not the first time that Naidu has resorted to lowering tax on ATF. Back in the late 1990’s as CM of undivided AP, he had lowered the tax to 4 per cent.
Industry players say that ATF constitutes between 40-50 per cent of the operating cost of domestic carriers. On an average, domestic ATF prices are about 70 per cent higher than international benchmarks, with the VAT on the fuel ranging from 4 per cent to 30 per cent in different States.
21/08/14 Ashwini Phadnis/Amit Mitra/Bhusiness Line
