Govt must slash ATF tax for airlines to cut domestic fares: Vijay Mallya
December, 27th 2008
Kingfisher Airlines Chairman Vijay Mallya on Friday indicated that unless the government brought down the sales tax on ATF to four per
cent, airlines in the country would not cut domestic air fares.
"Domestic fare cuts are really dependent on government policies in terms of sales tax on fuel," Mallya told reporters in response to questions after the annual general meeting of the company in Bangalore.
Mallya said once the government gives ATF the declared goods status, bringing down sales tax to a uniform four per cent, airlines in India would cut fares.
Airlines in India have "accumulated burden" when the crude oil prices
were at $147 a barrel. "We still continue to pay an average of 26% sale tax without any relief whatsoever," he said.
The airlines now have to pay oil marketing companies and Airports Authority of India in full, Mallya said, adding, "we have to generate enough cash to do so".