Aviation industry upset over jet fuel prices, seeks tax sops
NEW DELHI : With the Union Budget 2024-25 on the anvil, the Indian aviation industry hopes for a range of measures to reduce cost burden with respect to aviation turbine fuel (ATF), lower duty structure on import of private aircraft, categorization of airports under priority sector lending and more initiatives to improve regional connectivity in India. “The import duty has to be done away with. It comes to 3% when you import either by purchasing of aircraft or induct it on lease.
That is one biggest hurdle. Rest are all policy matters which can be dealt with. This makes import very expensive.
It has outlived its validity. It was imposed 15 years ago and has outlived its utility. The government must remove it," Harsh Vardhan Sharma, president, Business Aircraft Operators Association, said.
For Indian airlines, expenditure on jet fuel amounts to nearly 40% of their total expenses as compared to a global average of 20-25%. The ATF prices declined sequentially till June 2023 in the current financial year. After which, it increased sequentially till October but decreased sequentially again by 6% in November, 5% in December and 4% in January 2024.
However, they still remain at elevated levels as compared to pre-pandemic levels at ₹1.01 lakh per kilolitre as of January as compared to over ₹64,000 in 2019-20. “The Indian aviation industry expects rationalization in the duty structure of aviation turbine fuel as well as inclusion of the same under goods and services tax," Suprio Banerjee, vice president & sector head - Corporate Ratings, ICRA, said. Travel platform MakeMyTrip also reiterated that while the Union government has encouraged state governments to reduce value added tax on the jet fuel, a broader policy framework can
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