Budget 2014: Aviation Industry Demands Slashing Taxes On Jet Fuel

Ahead of the 2014 Budget, the aviation industry has asked the government to slash taxes on jet fuel and exempt aircraft engines from custom duty.

Senior officials presented their views on these and other issues at a pre-budget meeting with Civil Aviation Secretary, Ashok Lavasa, in Delhi. A similar meeting was convened by the Directorate General of Civil Aviation chief, Prabhat Kumar.

The meeting assumes significance as the Civil Aviation Ministry is likely to brief Prime Minister Narendra Modi in the next few days.

The major demands were including the aviation turbine fuel (ATF) in the 'declared goods' category, so that sales tax on it comes down to about 4% from the present rates ranging between 28% and 35% in different states across the country.

Airline officials present at the meeting said while the ATF was supplied to small aircraft like Bombardier's Q-400s or turboprop ATRs as 'declared goods' and charged around 5% tax, larger aircraft, weighing more than 40,000 kg, were levied up to 35% tax.

Jet fuel constitutes about 40-45% of the total cost of an airline.