The Hindu Business Line : Budget downer for aviation industry

New Delhi, Feb. 29 The Union Budget 2008-09 has dampened the spirits of the domestic aviation industry which was expecting a number of sops that would help bring down the spiralling costs being incurred by them.

“As an airline operator, I am quite disappointed as we have not been given any tax breaks. Customs duties and excise duty still remain prevalent on aviation turbine fuel, with holding tax on lease between 11 per cent and 92 per cent while withholding tax on interest remains between 5 and 20 per cent,” said the Managing Director of GoAir, Mr Jeh Wadia.

The industry was looking at the Budget to rationalise taxes and duties on ATF so that the prices come down, as also on removal of the surcharge imposed on first and business class international air travel.

The Managing Director of Paramount Airways, Mr M. Thiagarajan, felt the decision to boost hotel development at Unesco tourist heritage sites could have a positive impact on the aviation industry. “Generally hotels tie up with airlines to promote packages to various places and this could also happen when the hotels come up as a result of the Budget announcement. Besides, the emphasis on development of skilled manpower will also help several industries including aviation in tier II and III cities,” Mr Thiagarajan said.

Jet Airways and Kingfisher that had acquired Air Sahara and Air Deccan respectively were hoping that the budget would extend tax breaks that were provided to the merger of Air India and Indian.

The Finance Act 2007 extended the benefits of carry-forward and set-off of accumulated losses and unabsorbed depreciation available to amalgamation of one or more public-sector companies to facilitate the merger of Air India with Indian

Reacting to the budget proposals, the Minister for Civil Aviation, Mr Praful Patel, said that the Ministry would continue to pursue with the Finance Ministry and the States for rationalising the taxes on ATF.