New Delhi: Civil aviation minister Praful Patel has suggested setting up a Group of Ministers (GoM) to solve the problems faced by the aviation industry, especially on account of high taxes on jet fuel.
Patel said he suggested the appointment of a high-level committee or “even a Group of Ministers to understand how we can remedy the issues of the aviation sector, primarily with focus on ATF.”
His suggestion came a week after private airlines withdrew their strike call to protest the high sales taxes on aviation turbine fuel (ATF) and high airport charges.
Asked when this committee or GoM, if formed, should come out with its recommendations, he said, “we will push for an early resolution”.
“Though I can’t decide on a time-frame but may be a month or two. I hope so but I cannot speak on behalf of everybody,” he told Karan Thapar on the Devil’s Advocate programme.
He said the issues raised by the private carriers had been taken up at the levels of the Prime Minister and the finance minister.
Patel said a presentation had also been made by the civil aviation ministry before the Empowered Group of State Finance Ministers, headed by West Bengal finance minister Asim Dasgupta.
The minister had earlier said the option of issuing an ordinance to reduce sales tax on aviation turbine fuel was considered but not accepted as the Centre could not take away a major source of revenue from the state governments.
Maintaining that the government “sees reason” in the demand for lowering taxes on ATF, he said, “we have tried our best to convince the states but not succeeded as yet. That does not mean we will not do it again. State governments should understand that it is beneficial to them.”
Patel said when the industry was badly hit last year due to the hike in global petroleum prices to $140 a barrel, the government had helped the industry by cutting the 5% customs duty and asking oil companies to extend credit line to the airlines for six months.
On airport charges, Patel did not agree with suggestions that these were higher by 60% than the international rates, saying this was “an absolute myth”.
“I can show you airports where these charges are far higher as also those where charges are lower than in India.... Now many airports those are being built are world class.”
He said now that the Airports Economic Regulatory Authority (AERA) had come into being, all issues relating to airport charges would be decided by it and the government “will remain at arms length from it”.
AERA would determine tariffs for aeronautical services at all airports, like air navigation, landing and parking, and resolve disputes among stakeholders.