Airlines apply to DGFT for import of ATF
17 Sep 2008
New Delhi: Domestic Indian carriers, acting as a body under the Federation of Indian Airlines (FIA), have sought permission from the directorate general of foreign trade (DGFT) to import aviation turbine fuel (ATF). The underlying reason for the initiative is to achieve a 10 per cent reduction in operating costs through the import of ATF.
This reduction will become possible as import of ATF will attract customs duty of 5 per cent and zero sales tax as against the average prevailing sales tax of 21 per cent.
"FIA has applied to the DGFT for importing ATF. The current policy allows companies to import jet fuel provided it is meant for end-use and not for trade," a civil aviation ministry official said.
''DGFT has asked for a no-objection certificate (NOC) from the petroleum ministry,'' the official added.
FIA will import jet fuel on behalf of the airlines and will make infrastructure and logistics arrangements in partnership with airport operators and oil companies.
The imported ATF may be 25 per cent cheaper than the domestic production, according to industry estimates.
The person to moot the proposal, UB Group chairman Vijay Mallya, owner of Kingfisher Airlines and Kingfisher Red (formerly Air Deccan), had said that he would save at least Rs600 crore on an annual basis through the import of jet fuel.
