Government rolls back excise on aviation fuel for international flights

The rollout also comes at a time when airlines’ operating cost has surged due to a record rise in ATF prices.

Published: 09th July 2022 07:52 AM  |   Last Updated: 09th July 2022 07:52 AM   |  A+A-

Image used for representative purpose only. (File | PTI)

Image used for representative purpose only. (File | PTI)

By Express News Service

NEW DELHI: In a welcoming step for the aviation sector, the government has rolled back 11 per cent excise duty on aviation turbine fuel (ATF) used for international operations. The Finance Ministry has said ATF supplied as fuel to domestic carriers on international routes would continue to be exempted from basic excise duty from July 1.

The rollback comes after confusion arose regarding the excise duty on domestic airlines for their foreign flights after the government on July 1 slapped a `6 per litre special additional excise duty (SAED) or duty on the export of ATF or jet fuel.  Oil companies were of the view that with the levy of export duty, domestic carriers would be liable to pay 11 per cent basic excise duty for the  ATF they purchase for running overseas flights.

This issue was raised in a meeting chaired by India’s aviation minister Jyotiraditya Scindia on Tuesday as the levy would favour international carriers who are exempt from such duties as per the Chicago convention. Abhishek Jain, partner - indirect tax at KPMG India, says: “This alignment to the taxability as existent pre-imposition of excise duty on exports is a much welcome move for the airline industry, specifically in the backdrop of increasing ATF costs.”

The rollout also comes at a time when airlines’ operating cost has surged due to a record rise in ATF prices. ATF accounts for nearly 40 per cent of an airline’s operating expenses and this calendar year alone the fuel prices have gone up by a whopping 78 per cent . This has also made airfares at the movement much more expensive than in pre-covid times.  

After a gap of nearly 2 years and 3 months, international flight movements from India have started witnessing some form of recovery and home-grown carriers are leaving no stones unturned to tap this market which, with the expectation of Air India, has been historically dominated by foreign airlines.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp