The Hindu Business Line : Fuel for large aircraft may be ‘declared goods’

Mr Praful Patel, Minister for Civil Aviation, coming out after meeting Mr P. Chidambaram, Finance Minister, on aviation fuel in the Capital on Thursday. —

Our Bureau

New Delhi, Oct. 23 The Government may provide ‘declared goods’ status to aviation turbine fuel (ATF) being sold to Boeing and Airbus aircraft being operated by domestic carriers, thereby ensuring that it attracts a uniform sales tax of 3 per cent throughout the country.

The implementation of the decision will provide the much-needed fiscal relief as the sales tax levied on ATF sold to such aircraft varies from 4 per cent to more than 30 per cent.

High cost factor

The high-level of taxes imposed on ATF, which accounts for between 45 per cent and 50 per cent of the operating cost of most domestic airline is one of the main reasons for the industry reporting losses of more than Rs 4,000 crore.

Speaking to newspersons after a meeting with the Finance Minister, Mr P. Chidambaram, the Minister for Civil Aviation, Mr Praful Patel, said that all issues including taxes on crude and State level taxes and other steps that could be taken to help the industry through the current crisis were discussed.

Will address concerns

“The Finance Minister has been positive to our concerns. No decision has yet been arrived at and we will meet again in a couple of days,” Mr Patel said without going into the specifics of the discussion.

Earlier instance

Incidentally, the previous National Democratic Alliance under Mr A.B. Vajpayee had treated ATF provided to small turbo-prop aircraft as declared goods attracting a uniform sales tax of 4 per cent.

Then, the Government had said that the decision had been taken as such aircraft help provide connectivity to small town and cities around the country.

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