Aviation minister bats for lower taxes to boost sector

Pitching for lower taxes to boost civil aviation, Union Minister Ashok Gajapathi Raju today said states which responded positively to the Centre's request in this regard have witnessed a spurt in the sector.
"We are requesting the state governments to bolster the aviation activity in the country by becoming aviation friendly... Taxes are required, but taxing to death is not required," he told reporters here at the flagging off of the city-based Air Pegasus' maiden flight to Hubballi and Thiruvananthpuram.
Raju said the Centre had written to all chief ministers requesting them to be aviation-friendly and bring down taxes on Aviation Turbine Fuel (ATF).

Raju said ATF accounted for "40 and above per cent of an airline's total operations costs."
He said the states which responded to the Centre's call have seen a spurt in aviation activities there. "Some states have come forward. Those states which have come forward, there have been a spurt of aviation activities there," he added.
On the proposed aircraft Maintenance Repair and Overhaul (MRO) depot near Nagpur in Maharashtra, Raju said there were inordinate delays in getting the project started.

"I do agree MRO has taken a long time. Inordinate delays have happened. There are impediments like service taxes," he said.

The aviation ministry was requesting the Finance Ministry to remove MRO activity from service tax for a period of at least ten years, Raju said. "We are trying to do something, otherwise these things will never happen," he said.
The Minister said MRO activity was a big opportunity and can result in business worth million of dollars.
"As of now many planes which fly in Indian skies fly to places like Sri Lanka, Dubai and Singapore just for repair, and we see it an opportunity of about 700 million dollars business that can be conducted within India," he said.
The MRO depot is a joint venture between Boeing and Air India and it was conceived in 2004-05, but construction work started only in 2011.

The Boeing MRO project is billed as the most modern project in Asia, which could save huge amounts of foreign exchange and also time for airlines.
He also said the government wanted to extend its "Make In India" policy to "Repair in India" which would help generate employments for domestic engineers.
Replying to a query on the Karnataka government's request to the Centre on the pending airport project in Kalaburagi, he said the Airports Authority of India can take up the work if it was handed over without any impediments and liability.
Work on the Greenfield airport project has been affected due to termination of contract as the promoters failed to complete it on time.