Patel to states: rationalise taxes, take to the skies

NEW DELHI, JANUARY 18: In a bid to tackle the problems being posed by exorbitant rates of taxes levied by state governments on Aviation Turbine Fuel (ATF) and issues relating land acquisition to set up aviation infrastructure, the Civil Aviation Ministry on Friday asked the state governments to rationalise their taxation policies and land acquisition practices.

Speaking at the National Civil Aviation Conference, where state governments were also represented, civil aviation minister Praful Patel today said that rationalising taxes on ATF would encourage more carriers to fly across the country, which would, in turn, create aviation and tourism infrastructure and more jobs.

Patel said that states like, Delhi, Kerala, Tamil Nadu, Maharashtra, Andhra Pradesh, West Bengal and Goa had some of the highest rates of taxes on jet fuel and on ATFs that ranged from 4 to 34 per cent.

Patel said that states should compare their tax collection from ATF in 2004 and now, primarily due to the hike in global Oil prices and increase in the number of flights, should pass on the benefit to the airline industry.

In his concluding remarks, civil aviation secretary Ashok Chawla said that a more “reasonable intermediary figure” of sales tax on ATF should be arrived at where the losses caused by reducing taxes are made up through the increased volumes.

Speaking about land acquisition, the civil aviation minister said, even as Airports Authority of India (AAI) and other Central Government agencies would help develop airports, the onus was on state governments to provide land for new ones as well as for expansion of existing airports.

Patel added that the aspirations of the people has led to more connectivity within the country which is reflected by the fact that the number of airports in the country, has almost doubled from 50 in 2004 to almost 100 this year.

Patel also called upon the states to come forward and join the process in the growth of civil aviation saying the Centre alone will no more be able to cope with the tremendous growth.

He said that the states should use their infrastructure including operationalisation of the un-used airports and airstrips to bring them into the mainstream.

The aviation sector, he said, would in the next ten years bring in investments to the tune of $115-120 billion. It would become one of the top sectors for investment and also for employment generation.

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