Business tycoon ask CM to lower sales tax on aviation fuel
May, 12th 2011
A delegation representing Federation of Indian Airlines met chief minister Prithviraj Chavan and made a strong case for a reduction in sales tax on air turbine fuel (ATF) in Maharashtra . The meeting held in Mantralaya on Wednesday.
The delegation , led by business tycoon Vijay Mallya , told Chavan that airlines preferred to refuel in other states due to the higher tax in Maharashtra .
The sales tax on ATFin the stateis 25%.Between 2008 and 2010, the state collected Rs 178 crore as sales tax on ATF. A total of Rs 44 crore has been collected as sales tax from the aviation industry during the first three months of 2011( January toMarch ).
Whilethe average per liter ATF price during 2005-2007 was Rs 29 .70, it shotup toRs 34 .30 in 2008-2010 . For the first three months of 2011, the average per litre ATF price stood at Rs 42.20.
"If the government lowers the tax , industry players will start refueling their planes in the state ," said an official.
Chavan informed the delegation that lowering the tax would impact the state's revenue collection . However , he asked the delegation members if airline operators would refuel in bulk in the state if the tax was lowered .
"If the state gets more sales volume ,then the government may consider reducing tax .Thiswillease pressureon the airlines without negatively impacting the state's revenue collection ," the official added .