The Centre will impress upon state governments to grant “declared goods” status to aviation turbine fuel (ATF) or jet fuel to help airlines tide over the high cost of the fuel.
“Why should ATF not enjoy “declared goods” status? Aviation is as much a public transport as any other mode of transport. State taxes on ATF do not lead to windfall revenue gains for any state,” a highly-placed government source said.
India is one the most expensive places to tank up for airlines with a diverse taxation structure across states that levy taxes ranging from four per cent to 30 per cent on aviation fuel. Airlines have been demanding that jet fuel is placed under the “declared goods” category that would attract a uniform tax of four per cent state tax.
The civil aviation ministry has already sent a proposal to the union Cabinet for approval. “The proposal will be taken up by the Cabinet soon and will help the airlines tide over the incidence of high taxes, the official added.
The source, who did not wish to be identified, also added that petroleum products are subsidised and there is a case for ATF being granted declared goods status.