Airlines, govt discuss EU tax plans | delhi | Hindustan Times
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Airlines, govt discuss EU tax plans

delhi Updated: Dec 27, 2011 01:38 IST
HT Correspondent

A high-level meeting of representatives from various ministries and airlines was held at the Rajiv Gandhi Bhawan headquarters of the civil aviation ministry to firm up India's response to EU's plan to tax airlines on the basis of carbon emissions beginning January 1.

India has already officially protested to EU on this issue as the move could hit local carriers, which fly to Europe, as they would need to pay taxes for landing in and taking off from European airports based on the type of aircraft, which in turn would lead to increase in airfare by as much as $50-250.

Under the EU Emissions Trading System (ETS), airlines using EU airspace will have to pay a fee for carbon emissions that exceed a set cap.

Officials said the move could cost the three Indian carriers - Jet Airways, Kingfisher and Air India - which fly to Europe around R500 crore annually. Kingfisher chairman Vijay Mallya told reporters at the aviation ministry that he was "worried" about the EU tax.

In September, India had hosted a meeting of the International Civil Aviation Organisation (ICAO) Council and non-EU member states on inclusion of aviation in EU-ETS, which was attended by 26 countries including the US and China.

The meeting had noted that the EU-ETS measures violated the Chicago Convention governing international aviation as also provisions of the WTO.

India is likely to hold a second meeting in February. "There is no immediate threat as airlines don't need to start paying from January 1 itself. EU cannot unilaterally make a rule and we hope that better sense prevails," an official said.