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Delhi mulls reduction in ATF sales tax
January, 17th 2009

The Delhi government will consider reducing sales tax on jet fuel to help the cash-strapped airlines industry, Delhi chief minister
Sheila Dikshit has said. Refusing to commit herself, the CM said her government would try to bring down taxes on the lines of the Maharashtra, Kerala and Andhra Pradesh governments.

I am not promising you anything. But let me see how we can help you. I have been informed that the tax has been reduced in some other places. I will try to do that but let me see how we can do it, Ms Dikshit said at a seminar on aviation in Delhi on Friday. Kingfisher Airlines chairman Vijay Mallya urged the Delhi CM to consider reducing the sales tax on aviation turbine fuel (ATF) to 4%, a demand backed by civil aviation secretary M Madhavan Nambiar, who was also present.

Maharashtra, Kerala and Andhra Pradesh have all reduced the sales tax on jet fuel to 4%. Delhi accounts for almost 25% of the total passenger traffic in India. The airlines do almost 20% of the total fuel tankering from the national capital and according to industry estimates, this could rise to 25% or more if the tax rates are slashed.

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