The Hindu Business Line : Govt rolls back customs duty on aircraft imports for charters

New Delhi May 3 The Government on Thursday withdrew the proposal to levy a 3 per cent customs duty, apart from a 16 per cent countervailing duty and a 4 per cent special customs duty, on aircraft being imported for operation of non-scheduled charters and for training purposes.

This relief will also be available for aircraft being imported by non-scheduled airlines for operating point-to-point services.

The Union Finance Minister, Mr P. Chidambaram, made these announcements on Thursday while replying to the debate on the Finance Bill 2007 in the Lok Sabha.

The import of aircraft for private use will, however, continue to attract CVD at the existing rate.

While presenting the Union Budget 2007, Mr Chidambaram had proposed an import duty of 3 per cent on all private import of aircraft, including helicopters. These imports were also to attract CVD and additional customs duty.

The imposition of the duties would have put an additional burden of almost Rs 26 crore on an aircraft costing around Rs 100 crore, officials of the Ministry of Civil Aviation indicated.

While calling for a roll back, stakeholders had argued that the implementation of the Budget proposals would be contrary to Government plans of promoting connectivity to remote areas, including the north-east, islands, hills and national parks as the basic cost of importing aircraft meant to serve these areas was being enhanced.

Besides, with the country facing a severe shortage of pilots any additional financial burden put on aircraft being imported by training schools would also be counter productive. "Established institutes like the Indira Gandhi Rashtriya Uran Akademi would need increased budgetary support to enhance their fleet. In addition, the helicopter services operated by the non-scheduled operators in Andaman and Nicobar Island, Lakshadweep, and for a variety of other functions including medical evacuation would become more expensive," Government officials pointed out.

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