High tax, ATF hurting aviation sector: Singh

With the aviation sector facing acute crisis, civil aviation minister Ajit Singh is unhappy over the recent increase in service tax on air tickets and high jet fuel price and would take up the issue with the  Prime Minister Manmohan Singh for a re-look into the matter.

Ajit Singh, who has already written to finance minister Pranab Mukherjee and plans to consult him again, underlines that the increase effected recently in the service tax on air tickets and levies on aviation turbine fuel [ATF] is hurting the aviation sector.

Earlier, service tax was levied on 10 per cent of the total value of the ticket with a cap of Rs 100 for domestic ticket and Rs 500 for international ticket. This has been hiked to 40 per cent of the total value of the ticket without any cap.

With regard to ATF price, he said it was at least 50 per cent higher here than in places like Singapore and Sharjah and determined not in ‘transparent’ manner.

‘Both these issues I will take up... I had written to the Finance Minister long time ago, I will write to him again and I will consult him. I will talk to the Prime Minister also,’ Singh said.

Talking about service tax, he said, ‘no other country’ imposes it on international passengers while for domestic passengers, it is uniform under GST, on which they get offset.

Referring to the increase in service tax on air tickets, the Minister said, ‘it is really hurting the passenger fares.’

Singh cited it as one of the reasons for the aviation sector doing ‘very badly’. He said ATF here costs at least 50 per cent more than in big cities like Singapore and Sharjah.

‘Most of this is partly because ATF is not a ‘notified product’ which regulator in the oil company can check. Therefore, the pricing is not transparent,’ he said.
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