The Hindu Business Line : Centre plans 4% uniform levy on ATF

Hyderabad, Feb. 12 In a bid to bail out airlines from huge oil overheads, the Union Government is contemplating a uniform tax to be levied on ATF (aviation turbine fuel) of 4 per cent across the country.

Mr Praful Patel, Union Minister for Civil Aviation, who has been advocating a reduction in the tax, said he was pushing for the uniform tax rate with the Finance Ministry so that suitable changes could be brought about in the Budget.

Addressing newspersons here on Tuesday, he said: “High ATF tax rates have begun to hurt airlines in the backdrop of rising crude oil prices. They also varied in different States. “We want ATF to be made a ‘declared goods’, so that it would attract uniform tax,” he added.

The Minister was here in connection with the first landing of a test flight at the Rs 2,478-crore Rajiv Gandhi International Airport (RJIA) promoted by the GMR group.

Andhra Pradesh also became the first State to respond to Mr Patel’s request on ATF tax rationalisation. Dr Y.S. Rajasekhara Reddy, Andhra Pradesh Chief Minister, who was present at the new airport, announced a reduction of VAT (value-added tax) on ATF to 4 per cent from 33 per cent, one of the highest rates in the country. The State is likely to lose Rs 60 crore on this count.

Independent authority

The Union Government would set up the Airport Economic Regulatory Authority by the middle of this year to regulate UDF (user development fee) and other economic issues related to the airports.

“You have to have user development fee (UDF) when you get world-class facilities. The UDF will be levied progressively. It would also be dependent on the distance and would be less for short distance and higher for long haul flights.”

We will take up the matter with the airport operators. The issue would also be taken up by the authority,” the Minister said.

The Government will also soon come up with a new infrastructure policy with more liberal packages for the aviation sector.

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