Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: articles on VAT and GST in India :: due date for vat payment :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: VAT Audit :: form 3cd :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: VAT RATES :: empanelment
 
 
Service Tax »
 100 Opening GST Profiles- Indirect Taxation- ALL Industries
 New Opening Sr. Manager-Indirect Tax For A Leading Power Company
 Tax Collected At Source Under GST Regime
 India's GST challenge makes Donald Trump's tax overhaul look easy
 What does GST hold for Indian youth?
 GST will help India move towards becoming a commercial union
 Friendly advance ruling mechanism to smoothen ride under GST regime
 GST impact: Small businesses could under-report income initially
 The art of doing business under GST
 GST council to debate tax on services, fitment of items on April 18-19
 Online Services – Changes In Service Taxation

Aviation ministry proposes abolition of service tax on air tickets & sales tax reduction on ATF
June, 04th 2012

The aviation ministry has called for abolition of service tax on air tickets and reduction in sales tax on aviation fuel from an average 25% to a uniform 4%, proposals that may not only nurse bleeding carriers back to profits, but also rein in soaring fares.

In a consultation paper released last Thursday, the ministry said the policy changes would bring in economic benefits to the tune of 45,000 crore, far outweighing the revenue loss to the exchequer, which is estimated at 3,750 crore.

The proposals are part of a larger action plan being drawn to develop India as an aviation hub. The ministry will discuss the plan with the Prime Minister's Office on Monday.

"The total operational losses of all the (Indian) airlines for 2008-09, 2009-10 and 2010-11 are approximately 19,000 crore," Civil Aviation Minister Ajit Singh had told Parliament last month. He said 10,000 crore of losses were anticipated in 2011-12 alone. The minister said all domestic carriers, except IndiGo, were making losses.

The ministry has argued that knocking off service tax on air tickets would make them cheaper by at least 10%, providing relief to travellers stung by the dramatic rise in ticket costs in recent months.

Airfares on major domestic and international routes have shot up 30-50% during April-May mainly because of the pilots' strike at Air India and the uncertainty surrounding Kingfisher Airlines. The International Air Transport Association, a lobby group of airlines, has welcomed the ministry's initiative.


"Aviation supports 1.7 million Indian jobs and contributes 0.5% to the country's GDP," said Amitabh Khosla, IATA's country director for India. "It has the potential do much more for the economy if the government would successfully deliver on the long-standing issues of taxation that are destroying the competitiveness of Indian airlines."


Experts believe that India's unique geographical location, tourism and trade potential offer the country a great opportunity to become a global aviation hub, but unimaginative policies have allowed other aviation centres such as West Asia and South-East Asia to flourish at India's expense.

"An aviation hub's direct and indirect impact on employment creation, growth of commerce and government revenues is still not well appreciated," said Amber Dubey, partner and head (aviation) at global consultancy firm KPMG. "The need of the hour is to abolish all taxes like excise, import duties, sales tax and service tax on aviation for a period of 10 years."

Aviation turbine fuel accounts for 40% of Indian carriers' costs as against the global average of 20%, thanks to state governments levying sales taxes as high as 30%. Although states like Punjab have recently reduced the ATF tax rate to 4%, fuel sales levies remain high in Maharashtra and Delhi that host the largest air traffic.

 

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions