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ComMin to FinMin: Ask State Govts to cut sales tax on ATF
The Commerce Ministry has asked its finance counterpart to urge the State Governments to reduce sales tax on jet fuel to help cash-strapped airlines.
Jet fuel constitutes almost half of an airline’s operating costs in the country, compared to 20-25 per cent globally, due to high taxes on aviation turbine fuel levied by different states — ranging from 4 per cent to 30 per cent. The airlines have been demanding reduction in sales taxes by the State Government.
In a letter to Finance Secretary RS Gujral, Commerce Secretary SR Rao has asked him to intervene in the matter.
“The Commerce Ministry has asked its finance counterpart to take up the issue with respective State Governments to bring down the sales tax on ATF. The move would hugely benefit domestic airlines, which are facing huge credit problem,” an official told the news agency.
According to the official, there is a difference of 5 per cent in sales tax on ATF in Mumbai and Delhi. While Delhi has 20 per cent sales tax on ATF, Mumbai levies 25 per cent and thus the number of airlines refuelling their planes in the national capital now is twice as much as in Mumbai.
The Commerce Ministry has asked its finance counterpart to urge the State Governments to reduce sales tax on jet fuel to help cash-strapped airlines.
Jet fuel constitutes almost half of an airline’s operating costs in the country, compared to 20-25 per cent globally, due to high taxes on aviation turbine fuel levied by different states — ranging from 4 per cent to 30 per cent. The airlines have been demanding reduction in sales taxes by the State Government.
In a letter to Finance Secretary RS Gujral, Commerce Secretary SR Rao has asked him to intervene in the matter.
“The Commerce Ministry has asked its finance counterpart to take up the issue with respective State Governments to bring down the sales tax on ATF. The move would hugely benefit domestic airlines, which are facing huge credit problem,” an official told the news agency.
According to the official, there is a difference of 5 per cent in sales tax on ATF in Mumbai and Delhi. While Delhi has 20 per cent sales tax on ATF, Mumbai levies 25 per cent and thus the number of airlines refuelling their planes in the national capital now is twice as much as in Mumbai.
