Govt may extend tax sops on ATF to local airlines

Domestic airlines may be treated on par with their foreign competitors when it comes to paying various duties on fuel. The government is likely to extend tax concessions to domestic carriers on aviation turbine fuel (ATF), similar to what is enjoyed by foreign airlines.

They may also enjoy exemptions on excise duty and sales tax on ATF used for international operations. The finance ministry is considering a proposal to exempt sales tax and excise duty on ATF used by domestic airlines for foreign operations, sources said.

While central excise duty on ATF is 8%, sales tax varies between 4% and 39% in various states. If the exemption is granted, ATF costs for international operations may come down substantially, which is the single largest cost element accounting for about 40% of airline firms total cost. The fall in ATF prices may also benefit passengers hopping to foreign shores as they can expect a decline in air fares.

Click for complete article


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: