New Delhi: After petrol and diesel, the government is likely to reduce excise duty on aviation fuel, which will help keep air fares under check and reduce financial pressure on airlines.
While the civil aviation ministry was seeking a reduction for a while, the finance ministry, which had refused to play ball but is seen amenable to the proposal now. As a result, the aviation ministry has sent a fresh request for a reduction from the current level of 14%.
In March 2014, when global crude price crashed to $36 a barrel, the finance ministry had raised the levy from 8% to 14%. But with global price topping $80 a barrel, the current rate of tax is seen to be a big burden, pushing several airlines into losses during the last quarter. The exchange rate is putting further pressure as rupee has plunged to 73 to a dollar.
“In 2016 when crude price had fallen, excise rates were hiked to ensure there was no loss of revenue to the government from fuel taxes. Now that crude is inching up, it is a natural corollary that rates must be lowered,” said a source.
06/10/18 Saurabh Sinha/Times of India
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While the civil aviation ministry was seeking a reduction for a while, the finance ministry, which had refused to play ball but is seen amenable to the proposal now. As a result, the aviation ministry has sent a fresh request for a reduction from the current level of 14%.
In March 2014, when global crude price crashed to $36 a barrel, the finance ministry had raised the levy from 8% to 14%. But with global price topping $80 a barrel, the current rate of tax is seen to be a big burden, pushing several airlines into losses during the last quarter. The exchange rate is putting further pressure as rupee has plunged to 73 to a dollar.
“In 2016 when crude price had fallen, excise rates were hiked to ensure there was no loss of revenue to the government from fuel taxes. Now that crude is inching up, it is a natural corollary that rates must be lowered,” said a source.
06/10/18 Saurabh Sinha/Times of India
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