HC to hear FIA's plea against levy of Rs 7500-8500 per flight

The Delhi High Court today said that it would hear arguments on February 1 on a plea by Federation of Indian Airlines (FIA) challenging the government's proposal to levy Rs 7500 to Rs 8500 per flight operated by Indian carriers to create fund to develop regional airports.
"Pleadings are complete in the matter. List it for hearing on February 1," a bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal said.
During the hearing, FIA's counsel told the bench that the matter should be heard as authorities have started demanding money from the airlines.
After Additional Solicitor General Sanjay Jain said that pleadings in the matter wer complete and the case should be listed for arguments, the FIA's counsel said, "Let them not take coerceive steps."

However, the bench said that it would hear arguments on February 1.
The Ministry of Civil Aviation and the Directorate General of Civil Aviation (DGCA) had earlier defended the proposal and termed the FIA's plea as "misconceived" saying it would eventually lead to growth of civil aviation sector as a whole.

The ministry and DGCA, in a joint affidavit, had claimed that the scheme was in the long-term interest of the air transport sector and to further widen the penetration of air services in the country.
FIA had said that while the scheme allows it to pass on the levy to the passengers, it cannot do so as it is not a fee for which the carriers are rendering any service to flyers.

FIA, which represents scheduled carriers like Indigo, Jet Airways, GoAir and SpiceJet, has also sought quashing of the October 21 notification inserting the rule for imposing the levy as well as the November 9 order declaring rates of the levy and the categories of the scheduled flights on which these would be imposed.
(Reopens LGD7)
FIA has said that if the financial burden was passed on to the flyers, it would lead to an increase in tariff which would run counter to objectives of the National Civil Aviation Policy and the Ude Desh ka Aam Naagrik (UDAN) scheme under it to bring airfares down to affordable rates.

UDAN, as per the Centre, seeks to connect small cities by air as well as making flying more affordable.
For UDAN, the government has created the Regional Connectivity Fund (RCF) -- which will be 80 per cent financed by the Centre and the rest by the respective states.
To provide funding for the flights operated under the regional connectivity scheme, the ministry has decided to impose a levy on every departure on major air routes such as Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata.
FIA has said it has not challenged the creation of the fund but only the imposition of the levy, as it was allegedly "beyond the executive competence and required parliamentary enactment" as the levy was in the nature of a tax.

As per FIA, flights under category II or IIA routes, those operated on the regional connectivity scheme routes and those having a max certified take-off mass not exceeding 40,000 kilograms (or small aircraft) have been exempted from the levy.