A 15-year tax on imported private jets might fly into the sunset

livemint.com:

NEW DELHI : The government is considering a proposal to scrap the import duty on business jets as the tax introduced a decade-and-half ago has approached the end of its intended tenure. A tax of 2.5% is levied on private and business airplanes that are imported for so-called non-scheduled aircraft operations, while there’s no such tax on commercial jets.

The civil aviation ministry wants to bring these two categories on par and in December wrote to the finance ministry suggesting the abolition of import duty on private and business planes, according to two officials familiar with the development. The duty structure, albeit not too high and insignificant to the exchequer, is often blamed for India’s stagnant private charters industry.

The total number of non-scheduled operators in the country has remained at 100-120 over the past 15 years. Several large conglomerates including Reliance Industries Ltd, Tata Group, and Jindal Group own business jets and helicopters through subsidiary companies operating non-scheduled flights.

As per the latest data from the Directorate General of Civil Aviation, there were 381 aircraft and helicopters registered with 112 non-scheduled operators in India as of December. Also read: Six business jets on way to Adani Group “The process started with a communication from the finance ministry last year about deciding the fate of the basic custom duty of 2.5% on the import of aircraft for non-scheduled operations," one of the officials mentioned earlier said.

“The civil aviation ministry in December wrote back in support of removing the basic custom duty. A decision will be taken once the new government comes to power." The ministries of civil aviation and finance, and the chairperson of the