Aviation industry's concerns to be addressed: Minister

Civil Aviation Minister P. Ashok Gajapathi Raju Tuesday assured the industry stakeholders that concern regarding growth of the sector will be addressed by the government.

The minister's assurance came at the pre-budget interaction with representatives of the civil aviation industry here.

In his address, the minister stated that air travel has a multiplying effect on economy and, therefore, decisions should be made to allow civil aviation sector to grow to its full potential.

"The different wings of the government would come together to find solutions for the problems faced by the industry today," Raju said.

During the interaction, issues regarding up grading the standards for security equipment, establishment of a "green" channel for equipments used for maintenance, repair and overhaul (MRO) operations and allocation of funds for air navigation facilities came up for discussion.

The ministry said in a statement that the industry made several suggestions for the promotion of MRO sector including removal of service tax, reducing VAT (value added tax) on MRO activities, ten-year tax holiday and abolition of central excise duty on MRO component.

"If these measures are taken, it was represented, that there would be creation of one lakh jobs with more than a billion dollar revenues to the country on account of MRO activities," the ministry said.

The stakeholders also requested to treat ATF (air turbine fuel) as a "declared goods" so that VAT on ATF could be reduced to four percent nationally.

"This would make airlines more viable as ATF constitutes more than 45 percent of the cost," the ministry added

Representatives of the airline industry requested that the sector should be given the infrastructure status to enable access to funds with lower interest rate through external commercial borrowings.