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AI undecided on ATF import

Published: 29th August 2012 10:09 AM  |   Last Updated: 29th August 2012 10:09 AM   |  A+A-

Air India is yet to decide about direct import of aviation turbine fuel (ATF) which would help the financially beleaguered carrier save up to Rs 300 crore per year.

Civil Aviation Minister, Ajit Singh, while replying to a question in the Rajya Sabha on Tuesday said “Air India has not yet decided about import of ATF yet.

Singh had earlier informed the House that five domestic airlines - including private carriers Kingfisher Airlines, SpiceJet, IndigG, Go Airlines and state-run Air India - were granted permission to import ATF directly.

Kingfisher has been allowed to import five lakh kl of ATF worth `2,233 crore, SpiceJet 50,000 kl worth `235 crore, IndiGo 7.15 lakh kl worth `3,200 crore,  GoAir two lakh kl worth `1,200 crore and Air India one lakh kl worth `503.93 million, he had said in written reply.

Allowing direct import of ATF has been a long standing demand of the airlines as high taxes on ATF by the state ranging from four per cent to 30% has been hitting them hard as they have to spend more than 40% of the operating cost on fuel.

It may be mentioned that ATF prices in India is among the highest anywhere in the world as states tax the commodity as it is associated with the affluent class who can afford to fly.

The airlines have been demanding reduction in sales taxes by the state government besides bringing ATF in the declared goods category. Commodities that enjoy the Declared goods status attract 4 per cent tax across the board.

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