Wednesday, September 26, 2018

Government hikes customs duty on ATF imports from nil to 5%

Aimed at narrowing Current Account Deficit (CAD), the centre on Wednesday has taken tariff measures, by way of increase in the basic customs duty of 19 products including aviation turbine fuel (ATF), to curb import of certain imported items.

The government has increased the customs duty of ATF to 5 percent from nil.

The decision is a set back for airlines as they are already struggling with rising fuel cost and low fares.

According to industry sources, the rise in import duty of ATF won't affect the carriers as they are not importing it except Indigo and even their imports are negligible.

The 5 percent duty would increase the cost by $9 million and the quantum is quite small - total fuel bill for Indian carriers for FY18 would be Rs 300billion, Jet Airways sources told CNBC-TV18.

"Comparing this with 30 percent of cost increase due to rising crude and depreciating rupee this impact doesn't really change the economics for the industry," they said.
26/09/18 CNBC TV18

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