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Moily agrees to seek lower tax status for aviation fuel

HT Correspondent, Hindustan Times  New Delhi, December 04, 2012
First Published: 22:21 IST(4/12/2012) | Last Updated: 22:22 IST(4/12/2012)

Aviation minister Ajit Singh and oil minister M Veerappa Moily will make a joint representation to finance minister P Chidambaram to demand declared goods status for jet fuel (ATF).


A declared goods status would mean that ATF will attract central sales tax of 3%, instead of varying rates of local sales tax or VAT — between 20-30% in different states.

“He (Moily) agreed to this,” Singh said. “We will jointly make a representation to the finance minister,” Moily said. ATF makes up for over 40% of an airline’s operating costs.

Singh is also learnt to have raised the issue of alleged restrictive practices on the part of state-owned oil firms.

The aviation minister also raised the issue of Air India not being given discounts similar to what some foreign and Indian private carriers allegedly get from state-owned oil firms.

An aviation ministry official said AI owes Rs.4,200 crore in fuel dues to oil firms which will be paid by April once the Centre releases grant under financial restructuring of the national carrier.

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