Praful Patel backs aviation industry demands in meeting with PM
15 Mar 2007
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New Delhi: The civil aviation minister, Praful Patel, in his meeting with prime minister Manmohan Singh on Tuesday appealed for a reduction in taxes on jet fuel prices, which constitute as much as 40 per cent of the total cost of a airline ticket. "The ministry of civil aviation fully supports airlines and the aviation industry that fuel prices need to be rationalised," Patel told reporters here after he met the prime minister along with tourism minister Ambika Soni. As per the 2007-08 budget proposals, an amendment to the central Sales Tax Act would treat Aviation Turbine Fuel (ATF) as a 'declared good' only for small aircraft. The aviation industry wants the concession to be extended to all types of planes. "Oil PSUs must reduce ATF prices and state governments must slash sales tax on ATF. Those states which are doing so are the beneficiaries as they are enjoying more air traffic," he said, adding "I am unhappy with oil PSUs for not reducing ATF prices and not encouraging competition in its supply". The two ministers also raised other issues relating to the budget proposals for the aviation industry. Patel is understood to have supported the concerns of the aviation industry about the imposition of withholding tax on aircraft and aircraft engines leased from foreign countries, which it is exempted from doing so till March 31. The industry wants the exemption to continue.
