NEW DELHI: In a bid to bring aviation turbine fuel (ATF) within the purview of goods and services tax (GST), the aviation secretary met the revenue secretary on Tuesday. ATF prices have direct bearing on the air fares and the Civil Aviation ministry has voiced its concern on this.
A civil aviation ministry official said that the ministry is of the view that ATF should be brought under GST and for this the ministry has earlier also written to the ministry of finance.
Currently, diesel, petrol, crude oil, natural gas and aviation turbine fuel are outside the purview of goods and services tax, and states have the right to impose value added tax on these items. Airlines companies have also demanded to bring ATF under the GST saying that it comprises a substantial chunk of operational costs of the airlines.
Apart from this, reduction on the GST levied on the aviation maintenance, repair and overhaul (MRO) industry was also discussed. The ministry is also trying to bring it down to a level of 5 per cent (from existing 18 per cent), said the official.
At present, the MRO industry is taxed at 18 per cent, making aircraft servicing in India costlier than other countries. In October last year, the MRO industry had made a representation to the Civil Aviation Ministry demanding protection from the GST.
Besides, discussion on the financial condition of Air India was also held and the aviation secretary R N Choubey said that government is committed to help the national carrier. Sources said that the issue of cash infusion will be considered later. Earlier, salaries were delayed for about three months in a row in Air India and the company had sought an additional funding of around Rs 2,000 crore from the government to tide over the situation.
The national carrier India had been receiving on an average Rs 3,000-4,000 crore funding per year from the government till financial year 2013-14, but, the amount got substantially reduced after that. In 2018-19, the carrier was allocated about Rs 650 crore in view of the privatisation plan. However, the privatization did not took off as the government did not receive even a single buyer.