By IANS
New Delhi : Civil Aviation Minister Praful Patel Wednesday asked the finance ministry to prune taxes on transport fuels in the upcoming national budget to bring down the “already very high” prices of aviation turbine fuel.
“The increasing cost of fuel and high taxes are burdening the airlines,” Patel said at a meeting with Finance Minister P. Chidambaram and his budget team, adding aviation fuel accounts for 39 percent of a carrier’s operational cost.
“The ATF (aviation turbine fuel) prices are already very high,” Patel said ahead of the budget to be presented by Chidambaram end-February.
According to aviation ministry officials, even though the finance minister did not make any commitment, he was sympathetic to the cause of domestic aviation sector that is reeling under cost escalations.
The state taxes on aviation fuel vary between 4 percent in Jharkhand to 38 percent in Maharashtra.
The minister also sought an exemption under the Income Tax Act, as extended when Indian Airlines was merged with Air India, to bring down the prices of aviation fuel by making it a “declared” good as opposed to a “luxury” commodity.
Patel told reporters later that the finance minister assured him that he, too, would impress upon states to prune taxes at the meeting with chief ministers in the national capital Friday.
“I have already asked the state governments to rationalise various taxes and duties levied on the airlines sector.”