Indian states have deferred the decision to revise a sales tax on aviation turbine fuel, seeking fresh details from the federal government.
The states once again have deferred the decision to review the issue of sales tax on aviation turbine fuel and have asked the federal government to provide some fresh details, The Tribune (NYSE:TXA) newspaper reported Wednesday.
The officials from the civil aviation ministry had asked the states to lower the sales tax on ATF before the meeting of Empowered Committee of State Finance Ministers in Srinagar in northern Jammu and Kashmir state. However, the issue remained unresolved as the states asked for some new details from the federal government.
The panel last week asked the civil aviation ministry to explain how ATF prices were fixed before they could decide to reduce sales tax on jet fuel.
India's government-run and private airlines have been demanding the tax on aviation fuel be reduced to 4 percent. States had been asked by the federal government to consider cutting sales tax on jet fuel to help airlines tide over huge losses due to rising fuel costs.
The aviation industry feels that states are unlikely to make a favorable decision. This means the woes of the airline industry are not going to end soon and passengers may see another hike, though not immediately, said an official of a private airline.
The past four hikes in jet fuel prices have made fuel costs account for more than half of airlines' operating costs, because of which passengers have seen a substantial hike.