The Hindu Business Line : Refund of excess air fare — Clarification sought from Ministry

IN an effort to ensure that the tax sops announced by the Finance Minister, Mr Jaswant Singh, for the civil aviation sector are passed on to the customer, the Ministry of Civil Aviation is to seek clarification from the Ministry of Finance on refund of Inland Air Travel Tax (IATT) which has already been collected by the private airlines.

This emerged at a high-level late night meeting which the Minister for Civil Aviation, Mr Rajiv Pratap Rudy, had with the Chief Executives Officers of Jet Airways, Indian Airlines and Air Sahara here today.

"We hope to have the clarification from the Ministry of Finance by tomorrow. Thereafter the private airlines will also be in a position to refund the monies collected towards IATT," official sources told Business Line.

The Finance Minister on Thursday abolished the 15 per cent IATT apart from slashing by half the excise duty on Aviation Turbine Fuel (ATF).

The need for seeking clarification arose as the private airlines claimed to have already deposited the funds collected for IATT with the Government, sources added.

At the meeting it was also decided that the Additional Secretary and the Financial Advisor in the Ministry of Civil Aviation, Mr V. Subramanian, would hold consultation with the oil companies to look into whether the tax cut on ATF announced by the Government was being implemented.

The airlines, which attended the meeting, assured the Government that they had already started passing on the benefits to passengers. Furthermore, IA has also done away with the Rs 500 foreign travel tax which a passenger had to pay earlier.

Meanwhile, the Minister felt that there was no need to have a regulator to ensure that the Government announcements are implemented. "Passing on the benefits which have been announced by the Government will help improve the passenger loads and therefore the profitability of the various airlines. It is in their interest to implement the Government decision," Mr Rudy said.