Airline lobby moves Delhi HC against regional connectivity levy

In its plea, FIA says the levy is a tax and is beyond the scope of executive competence under Aircraft Act, 1934

The Federation of Indian Airlines (FIA) moved the Delhi High Court on Wednesday challenging a government proposal to levy between Rs 7,500 and Rs 8,500 per flight from Indian operators for the development of regional airports under the recently introduced Ude Desh Ki Aam Naagrik (UDAN) scheme.

The FIA plea has challenged the imposition of the levy by terming it as a tax and as such, beyond the scope of executive competence under the Aircraft Act, 1934. Senior Counsel Arvind Datar, representing the FIA, also argued that if the levy were passed on to customers, it would place an immense burden on prices of flights, which would defeat the objectives of the National Civil Aviation Policy and run contrary to the UDAN scheme itself. The petition has sought the quashing of the October 21 notification introducing the levy, as well as the November 9 order fixing rates and categories of flights they would be imposed upon.

After hearing the submissions, the bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal issued notice to the Ministry of Civil Aviation, Airports Authority of India (AAI) and Director General of Civil Aviation (DGCA) seeking their replies by December 21, the next date of hearing. The court however, refused to pass any order staying the notification in the interim.

The UDAN programme aims to make the flying affordable for the average citizen and creates a Regional Connectivity Fund, which is to be financed by the Centre and the states in an 80:20 ratio. In a bid to provide such funding, the Ministry had decided to introduce the levy, which applies to certain categories of flights departing from major air routes such as New Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata.