Ministries Seek Aviation Fuel To Fall Under 'Declared Goods' Status.

To bring down the cost of air operations, the Civil Aviation and Petroleum ministries will represent to the Finance Ministry to notify jet fuel as a 'declared good', enabling levying of a flat 4 percent tax on it., reports said.

Presently, sales tax on aviation turbine fuel (ATF) ranges from 4 to 35 percent, varying from State to State.

The cost of jet fuel accounts for around 40 percent of the operating cost of Indian carriers, most of which are facing financial trouble.

Talking to media persons after a meeting, Civil Aviation Minister Ajit Singh said Petroleum Minister M. Veerappa Moily agreed to the proposal.

At the meeting, Singh is believed to have said that ATF prices in India were several times higher than countries in the neighborhood, including those in Southeast and the Gulf.

It was also stated that foreign airlines operating to India picked up jet fuel at concessional rates due to international agreements, rates which are far below those paid by Indian airlines for the same amount of fuel.

 The two ministers also agreed on a proposal to put ATF under the Petroleum and Natural Gas Regulatory Board (PNGRB) to check cartelisation amongst oil companies.

The aviation minister also suggested moving to the Mean of Platts Arab Gulf (MoPAG) pricing mechanism for jet fuel, instead of the import parity pricing that oil firms followed presently, to bridge the huge price differential in ATF pricing that airlines face.


Source : rttnews.com