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Airlines along with travel agent to be responsible for refund, says Aviation Minister

Our Bureau New Delhi | Updated on September 09, 2021

Union Minister for Civil Aviation Jyotiraditya M Scindia   -  PTI

Also, pitches for rationalisation of taxes on Aviation Turbine Fuel

Airlines will be equally responsible along with travel agents for refund in case of cancellation of tickets, Civil Aviation Minister Jyotiraditya Scindia said here on Thursday. He, however, refused to interfere in refund policy of airlines.

Addressing a press conference here, Scindia said that earlier, process of refund used to depend upon travel agents, now responsibility lies on airlines too. “Airlines will have to see that travel agents are making refund as soon as possible. If refund is not given, then airlines will also be responsible. Refund is to be made in time bound manner,” he said.

Each of the airlines has its own refund policy, because of that passengers may have to forego entire money paid at the time of booking.

When asked will the government take up this matter, Scindia made it clear that markets should be allowed to perform that function. “I do not think that mandating policy on every front should be the domain of the government. You should allow the free market to function,” he added.

Tax on aviation fuel

As on date, States and Union Territory levy VAT (Value Added Tax) in the range of 1-30 per cent. Nine States are charging between 1-4 per cent while remaining collect tax at the rate between 8-30 per cent. Also there are some States, where tax rates vary between cities.

Considering all these, Scidnia said lower rates will bring in more flights and act as an economic multiplier that will be ‘50-100 times more’ than what the States earn from a low level of revenue from VAT.

Aviation Turbine Fuel (ATF) costs up to half of the operational cost of a flight. “There are two solutions to VAT on ATF. One solution is to go to every State to make sure it is rationalised between 1-4 per cent, so that we have level playing field through out the country and we have proliferation of flights across the country,” he said.

On GST & States

Further, he added that the second solution is GST. “Taxation on ATF is the States’ issue and it is to be decided in GST Council which comprises of States too. Ultimately, you approach this way or that way but States are the key. So, it is important to canvas with the right constituency for us which is the States, as well as the Ministry of Finance. We are going to try to bring them onboard to see that we proliferate air travel,” he said.

Scindia also reminded that VAT revenue from all States is ranging between ₹3,500-4,000 crore. It is not a large amount of money, but it is a huge multiplier in terms of economic growth,” Scindia said while noting that there is a long way to go in increasing air travel and that the market is there, he said rationalisation of VAT is important in this regard.

Published on September 09, 2021

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