FinMin may notify ATF under ‘declared goods’

The finance ministry is considering putting the aviation turbine fuel (ATF) under the category of notified goods, a demand that has been repeatedly made by cash-strapped airlines, struggling under high taxes on the jet fuel.

ATF comprises about 40 per cent of an airline's costs and due to huge state levy, it is about 50 per cent higher than anywhere in the world and is among the prime reasons for losses incurred by airlines.

If notified as "declared goods", the jet fuel will attract only 4 per cent central sales tax (CST) as per the CST Act, 1956. Declared goods are goods of special importance under Section 14 of the Act.

Currently, tax levied on ATF by states, in a few cases, is as high as 30 per cent. Earlier last month, both civil aviation minister Ajit Singh and petroleum minister M Veerappa Moily had agreed to make a representation to finance minister P Chidambaram on the need to declare jet fuel as a 'notified good' to bring down its cost.

"The move is being considered by the ministry. Vijay Kelkar recently wrote a letter to the finance minister requesting him to consider the issue," an official source told The Indian Express, Kelkar, who headed the 13th Finance Commission, is an independent director on the board of Go Airlines, owned by Wadia group.

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