Delhi government hikes VAT on aviation turbine fuel
November, 25th 2015
Flying out of the national capital might become costlier marginally with Delhi government effecting a five per cent hike in VAT on aviation turbine fuel.
Delhi government has made an upward revision in the VAT on jet fuel to 25 per cent from 20 per cent from November 16, according to a notification.
"We are assessing the impact of the hike. As of of now, air fares remain at the same level and they have not been increased. A final call on passing on this hike to the end-consumer will be taken in due course," said a senior executive with one airline.
As per Indian Oil Corporation website, jet fuel prices in Delhi currently stand at Rs 44,846.82 per kilolitre. ATF constitutes approximately 40-50 per cent of an airline's operating cost.
Delhi airport is the busiest airport in the country with as many as 500 domestic and international flights as well as private and business jets daily departing the Indira Gandhi International airport here.
Besides national carrier Air India, private airlines such as IndiGo, SpiceJet and Vistara have most of their flights originating from the national capital.
Meanwhile, AAP government's move to levy higher VAT on jet fuel has come under severe criticism from Civil Aviation Minister Ashok Gajapathi Raju, who termed it as a step which would be like "taxing an economic activity to death".
"Taxes are a reality, but taxing an economic activity to death, probably India shows the way in that... We need to come out of that scenario and go forward," Raju said here.