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Thursday, Jan 15, 2004

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Air travel

This is with reference to the editorial "A pep to air travel" (Business Line, January 14). As the editorial points out, it is interesting how some taxes stick around long after they are not needed. The Inland Air Travel Tax, which had been imposed as a fuel surcharge during the 1990 Gulf War following the rise in crude oil prices, is a case in point. It has been more than a decade since the tax was announced. The situation is different today, and much has changed.

The Government did not abolish the tax as it brought more than Rs 1,000 crore a year to the kitty. It had been one of the impediments to growth of air travel in the country. Now that the tax has been removed, the domestic airline industry will find it easier to establish themselves in the sector.

Also, as mentioned in the editorial "It now remains for State Governments to complete the rescue." It is shocking to know that in Kerala the sales tax on aviation turbine fuel is as high as 39 per cent. With the global downturn in air travel, airlines are already finding the going tough. The State governments should not make matters even more difficult for them. One hopes the situation is rectified.

K. Narasimhan


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