Cash-strapped domestic airlines have asked the government to declare the civil aviation sector as 'core infrastructure' and rationalise taxes and duties on jet fuel, equipment, services and other items.
In their pre-Budget demands presented to Finance Minister Pranab Mukherjee, the airlines have strongly favoured declaring civil aviation as core infrastructure so that the sector could get tax and other benefits, airline sources said.
In a note presented by their umbrella body -- the Federation of Indian Airlines -- the domestic carriers are understood to have reiterated their demand for reduction of taxes on aviation turbine fuel (ATF) by designating it as 'declared good' to attract a uniform four per cent tax rate across the country.
The FIA, which has been demanding reduction of sales tax on ATF for long, had called for grounding all flights for a day on August 18 last year on the this demand as well as lowering of high airport charges. The call was soon withdrawn.
The airline industry has been suffering massive losses in the past three years, with Kingfisher accounting for over Rs 1,600 crore, Jet Airways and its subsidiaries over 1,000 crore and Air India about Rs 5,000 crore. The no-frill carrier IndiGo and full-business airline Paramount have been the only ones posting some profits.