Centre should absorb ATF sales tax burden
State governments charge upto 25-28% sales tax on ATF
Centre should provide relief to loss making domestic airlines by absorbing the Rs 3,200 crore sales tax burden on aviation turbine fuel and ease rules regarding domestic and international operations, Cyrus Guzder chairman of AFL private Ltd said at an aviation summit in Mumbai on Tuesday.
State governments charge upto 25-28% sales tax on ATF, and high fuel costs along with a weak rupee have been responsible for moutning losses.
Guzder said the Centre should direct the states to scrap the sales tax on aviation fuel and compensate the states for the loss by absorbing the Rs 3,200 crore burden.
He also suggested the government ease norms, which debar airlines with less than five years of operations to start international service, and the route dispersal guidelines which make it mandatory for airlines to fly certain percent of flights on tier II and III cities.
Kapil Kaul of Centre for Asia Pacific Aviation said no efforts are being made to overcome regulatory and structural challenges in aviation sector in an integrated manner.