Airlines fasten belts for fuel tax relief | india | Hindustan Times
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Airlines fasten belts for fuel tax relief

india Updated: Jun 15, 2009 22:54 IST
HT Correspondent
HT Correspondent
Hindustan Times

Airlines across the country are hopeful that in the forthcoming budget the government would address the issue of high taxes levied on aviation turbine fuel (ATF) by different states that vary from 4 per cent to 36 per cent across the states. The incidence of taxes on ATF in India is among the highest in the world.

The budget could also include a fresh infusion of equity and debt to the state-run Air India struggling to stay afloat. The infusion would partly mitigate the financial distress the company is in and also to meet its working capital requirements.

A senior official who did not wish to be identified that in the forthcoming budget the government could also allow the Airports Authority of India to float bonds of about rs 5,000 crores to fund airport modernisation programme.

Civil aviation sector in India like everywhere in the world is going through one of the worst phase. The industry is staring at a cumulative loss of Rs 10,000 crores, falling load factor and to top it all aviation turbine fuel, which is yet again getting dear.

After taking over as the civil aviation minister for a second term, Praful Patel has urged the airlines to go slow with their expansion plans in the backdrop of a global economic slowdown.

“The government needs to address at least one issue immediately and that is uniform tax for ATF. Granting declared goods status to ATF which would attract a 4 per cent tax across the states would not only be a big relief for the beleaguered sector but a good start,” Kapil Kaul chief operating officer of Centre for Asia Pacific Aviation, a global aviation and travel advisory firm said.

Kaul feels the government has two immediate tasks at hand one being securing a future for the flag carrier Air India and the other being ensuring that airlines have adequate access to capital.