Bringing jet fuel under GST will boost growth: SpiceJet chief at WEF

He said the move would bring down fares, help aviation sector see growth and thus compete globally

SpiceJet co-founder Ajay Singh on Friday pitched for bringing aviation- turbine fuel (ATF) under the ambit of goods and services tax (GST) to lower cost. The move will help bring down fares and boost the sector’s growth, Singh said at the World Economic Forum’s India Economic Summit.

Bringing fuel under GST will help airlines claim input tax credit, which will help lower cost.

“In aviation cost, ATF is the biggest item. We want it to be reduced. States should reduce sales tax and bring it within the GST so that we can claim input tax credit. If that happens, prices will come down, fares will come down and the aviation sector will see growth,” said Singh at the conference organised in partnership with the Confederation of Indian Industry (CII).

On the states’ insistence, petroleum has been kept out of the GST and hence continues to face the cascading effect of multiple taxes. However, certain petroleum products, including cooking gas, kerosene and naptha, are a part of the GST.

He added the sector was discussing GST-related issues with the government.

“GST is a concern... these glitches would be sorted out over a period of time,” said Singh.

He added for the sector to grow and compete globally, the taxes needed to come down. “We cannot have the most expensive aviation sector in the world, the most expensive ATF in the world, the most expensive airports in the world… now we have added to that by putting the GST, which is a really large tax on all sorts of activities related to aviation,” said Singh.

Spicejet is also looking at buying at least 100 seaplanes in order to increase its reach in areas which do not have air strips. Seaplanes are fixed-wing aircrafts that can take off and land on both water and airfields.