New Delhi: The finance ministry is not in the favour of bringing aviation turbine fuel under the Goods and Services Tax regime in the first half of 2019-20 (Apr-Mar), and would rather wait till the crisis at Jet Airways (India) Ltd was resolved, a senior finance ministry official said.
"For reduced prices to get reflected once aviation turbine fuel is under the GST, we need to do so at the right time when the industry has more competition," the official said.
According to data released by the Directorate General of Civil Aviation, InterGlobe Aviation Ltd-run IndiGo in April commanded 50% market share among the scheduled airlines in the country, a development most likely spurred by the collapse of rival Jet Air.
Jet Air shut down its domestic and international operations on Apr 17 due to severe liquidity crunch. Its market share stood at only 1% in April.
"There are doubts whether a lower tax incidence by including ATF in GST will reflect in prices with a single player dominating the aviation industry currently," the official said.
The civil aviation ministry has been pushing for the inclusion of jet fuel under the GST regime to help stressed airline companies as the tax incidence will fall drastically. Aviation turbine fuel account for about one-third of the overall cost of airlines. Under the current regime, total tax incidence on aviation turbine fuel is between 39% and 44% in most states, including 11% of excise duty.
28/05/19 Adrija Chatterjee/Cogencis
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"For reduced prices to get reflected once aviation turbine fuel is under the GST, we need to do so at the right time when the industry has more competition," the official said.
According to data released by the Directorate General of Civil Aviation, InterGlobe Aviation Ltd-run IndiGo in April commanded 50% market share among the scheduled airlines in the country, a development most likely spurred by the collapse of rival Jet Air.
Jet Air shut down its domestic and international operations on Apr 17 due to severe liquidity crunch. Its market share stood at only 1% in April.
"There are doubts whether a lower tax incidence by including ATF in GST will reflect in prices with a single player dominating the aviation industry currently," the official said.
The civil aviation ministry has been pushing for the inclusion of jet fuel under the GST regime to help stressed airline companies as the tax incidence will fall drastically. Aviation turbine fuel account for about one-third of the overall cost of airlines. Under the current regime, total tax incidence on aviation turbine fuel is between 39% and 44% in most states, including 11% of excise duty.
28/05/19 Adrija Chatterjee/Cogencis
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