Assocham seeks core sector status for aviation industry

The Associated Chambers of Commerce and Industry of India (Assocham) has suggested that the government should bring the aviation industry in the core sector in order to revive civil aviation in the country.

"The sustainability of airline industry would be severely eroded if it is not recognised as 'core industry'," Assocham said in a statement.

Assocham also sought 'declared goods' status to aviation turbine fuel (ATF) by lowering sales tax and revising its taxation structure.
 
ATF prices for 11 major international airports in the world as of July 2009 ranged between Rs23,000 and Rs26,000 per kilo litre, Assocham president Swati Piramal said, adding that Kuala Lumpur airport has the lowest price of Rs22,800 per kilo litre.

Against this, India's airports sell the `into-plane' ATF prices between Rs34,000 and Rs47,000 per kilo litre, she added.

The price of ATF at Hyderabd, which is the lowest among Indian airports, is 46 per cent higher than the price at Kuala Lumpur, while the price charged at Kolkata is almost double than that of at Kuala Lumpur, she pointed out.

While taxes levied by state governments contribute significantly to the high ATF prices in India, Indian ATF prices would be significantly higher than those abroad even without state taxes, she said.

Assocham also sought reinstatement of withholding tax exemption on aircraft lease rental payments and a lowering of service taxes to support the aviation industry.