The Hindu Business Line : AI Express gets sales tax waiver on ATF

Air India Express, the low cost airline from Air India, is expected to see a drop in its fuel bill during the current fiscal, with the Finance Ministry specifying that the aviation turbine fuel (ATF) for its international flights would be considered as "deemed exports".

So , the airline would not be required to pay any sales tax to the States .

Profit boost

AI officials indicated that the Finance Ministry move would help boost operating profit of the low cost airline, as it would result in an annual savings of between Rs 20 and Rs 25 crore, the estimated annual sales tax outgo of the airline on fuel.

With a view to providing a level playing field to Indian carriers vis-à-vis foreign airlines, the Central Government had, in 2005, taken powers to designate the Indian carriers that would be entitled for sales tax exemption on the ATF lifted for international flights.

Official sources said that Air India Express was the fifth Indian carrier to be granted the facility, after AI, Indian Airlines, Jet Airways and Air Sahara.

The decision to grant sales tax exemption on the ATF comes after a recommendation by the Ministry of Civil Aviation. Air India Express started operations in April 2005 with Boeing 737-800 aircraft.

The airline offers flights from various Indian cities to the Gulf and South-East Asia.

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