The empowered committee of State finance ministers has decided to withhold any cut in sales tax on aviation turbine fuel (ATF) till the central government lowers excise and Customs duties on the fuel. The committee has also decided to take up the matter afresh at its next meeting.
"The empowered committee has decided that there will be no change in the sales tax rate on ATF for the time being. The matter will be reviewed after additional information is received from the central government," a government source said.
The committee, which met in Srinagar yesterday, was provided a briefing by Arun Mishra, joint secretary in the ministry of civil aviation, highlighting the tough times faced by airlines in India due to surging oil prices.
The committee, however, sought additional information like the formula used to fix the ATF price and decided to review the matter in its next meeting. According to government sources, the States decided not to change the sales tax rate on ATF, which varies from 4 per cent to 30 per cent in most states, unless the Centre too changed its tax policy. Currently, the Centre levies excise and Customs duties on ATF at the rate of 8 per cent and 5 per cent, respectively.