New Delhi: The aviation ministry has formed a committee to rationalise additional taxes that airlines have to pay while uplifting Air Turbine Fuel (ATF) at airports across India, according to senior government officials.
Currently, airlines have to pay charges such as 'throughput charges', 'into plane charges' and 'fuel infrastructure charges' when they take ATF at any airport for their planes.
"These charges are taxed multiple times as they are billed in a circuitous manner," said a senior government official.
A second government official said that to develop a direct billing mechanism between airline companies and airport operators - so that these multiple taxes can be removed - the ministry of civil aviation has formed a committee comprising representatives from airlines, airport operators, oil companies, among others.
This committee is expected to submit its report soon, the second official added.
As per government estimates, if a direct billing mechanism is implemented, airlines would be able to save around Rs 400 crore per year.
In India, ATF accounts for almost 40 per cent of any airline's total expenditure. Therefore, any taxation on ATF always has a huge impact on airline companies.
Explaining the matter, the first official quoted above stated,"Take the example of billing for throughput charges, which is done by the airport operator to the oil company. In turn, oil company passes on the charges by billing airlines. However, due to such convoluted billing process, taxes such as GST and excise duty and VAT is added on to throughput charges."
18/08/19 PTI/Times of India
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Currently, airlines have to pay charges such as 'throughput charges', 'into plane charges' and 'fuel infrastructure charges' when they take ATF at any airport for their planes.
"These charges are taxed multiple times as they are billed in a circuitous manner," said a senior government official.
A second government official said that to develop a direct billing mechanism between airline companies and airport operators - so that these multiple taxes can be removed - the ministry of civil aviation has formed a committee comprising representatives from airlines, airport operators, oil companies, among others.
This committee is expected to submit its report soon, the second official added.
As per government estimates, if a direct billing mechanism is implemented, airlines would be able to save around Rs 400 crore per year.
In India, ATF accounts for almost 40 per cent of any airline's total expenditure. Therefore, any taxation on ATF always has a huge impact on airline companies.
Explaining the matter, the first official quoted above stated,"Take the example of billing for throughput charges, which is done by the airport operator to the oil company. In turn, oil company passes on the charges by billing airlines. However, due to such convoluted billing process, taxes such as GST and excise duty and VAT is added on to throughput charges."
18/08/19 PTI/Times of India
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