• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Ashwini Phadnis

New Delhi, April 18 The domestic airline industry is to petition the Empowered Committee of the State Finance Ministers for reducing and rationalising the sales tax being levied on aviation turbine fuel across the country.

This comes in the wake of global fuel prices hitting record high and yields on both domestic and international flights coming under severe pressure. This month alone, the average price of the fuel has touched Rs 56,000 per kilo litre, up from Rs 38,000 charged earlier. Airline industry officials point out that for some time now, the increase in global oil prices has been at a level that it has become difficult to absorb.

Air India, for example, expects its annual oil bill for 2007-08 to rise by around Rs 410 crore over the previous year. The airlines’ Chairman and Managing Director, Mr Raghu Menon, told Business Line that the total fuel bill of National Aviation Company of India Ltd (NACIL) during 2007-08 is expected to be around Rs 6,350 crore, up from Rs 5,940 crore in the previous year. NACIL is the new company into which Air India and Indian have merged.

While the airline industry has been increasing the fuel surcharge, this has not really helped compensatethe overall increase in the fuel bills as most airlines have been passing around 40 per cent of the fuel hike to the passengers and absorbing the rest, airline officials said.

The industry is also hoping that more States will follow the example of Andhra Pradesh and Kerala that have reduced sales tax on aviation fuel to 4 per cent.

More Stories on : Petroleum | Airlines | Taxation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Will the Rs 2 rice scheme do enough for the poor?

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line