New Delhi: Industry body Assocham on Friday suggested that the government should confer core industry status to the airlines business to sustain the aviation sector.
“The sustainability of airline industry would be severely eroded if it is not recognised as ‘core industry´,” Assocham said in a statement.
The chamber also sought ‘declared goods´ status to aviation turbine fuel (ATF) by lowering sales tax and revising its taxation structure.
“It is revealed that ATF prices for 11 international airports as on July, 2009, ranged between Rs23,000 and Rs26,000 per kilo litre. While Kuala Lumpur has the lowest price of Rs22,800 per kilo litre, India’s airports, the into-plane ATF prices ranged between Rs34,000 and Rs47,000 per kilo litre,” Assocham president Swati Piramal said.
Assocham pointed out that the lowest price of ATF among Indian airports is at Hyderabad, which is 46% higher than the price at Kuala Lumpur, while the highest price is at Kolkata with almost double than that of at Kuala Lumpur.
“While state taxes contribute significantly to the high into-wing ATF prices in India, it is a fact that if state taxes were fully eliminated, Indian ATF prices would still be significantly higher than those outside India,” it said.
Besides, Assocham advocated re-instatement of exemption from withholding tax on aircraft lease rental payments and issuing of show cause-cum-demand notices on some airlines for alleged violations of service tax rules under various taxable services. It also suggested lower service taxes.