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Indian Airline Boss Calls For Cut In Fuel Tax

by Mary Swire, Tax-News.com, Hong Kong

08 December 2010


A day after Civil Aviation Minister Praful Patel cautioned private airlines against predatory pricing, Indian domestic airlines seem to have taken note of the warning, with internal airfares now reduced.

Vijay Mallya, chairman and chief executive of Kingfisher Airlines, had earlier lashed out at the Directorate General of Civil Aviation’s attempts to rein in prices, and asked the government to cut “excessive” sales tax on aviation turbine fuel (ATF). In his most recent statement, however, Dr Mallya said:

“I am very happy to see the news that the Finance Minister intends to introduce a bill in Parliament, during the forthcoming session, to bring all ATF under the declared goods category, thereby attracting a uniform sales tax of four percent across the country."

“This long awaited initiative will stabilize the Indian Aviation industry and provide much needed financial stability once and for all. Kingfisher has the largest network in the domestic skies with 438 daily flights connecting 70 cities everyday. In response to the initiative from the government, Kingfisher will immediately reduce airfares across the board as soon as the declared goods classification is approved for ATF. Also, Kingfisher will ensure that there are no losses of jobs."

“With a fleet of 85 aircraft Kingfisher believes that it should make travel affordable to all Indians from different socio-economic classes. In particular, Kingfisher believes that air traffic potential in rural India can be stimulated apart from Metro travel where industry is cutting back on travel expenditure.

Kingfisher will not hesitate to launch additional flights to towns in rural India where there is no air connectivity at present despite airport infrastructure being available. All such initiatives will generate additional employment and no job losses.”

TAGS: tax | sales tax | India | aviation

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