Andhra Pradesh reduces sales tax to 4% on jet fuel

The civil aviation ministry’s requests to state governments to reduce sales tax on jet fuel has borne fruit with Andhra Pradesh deciding to slash it from 33% to 4%.

The ministry had recently convened the first-ever aviation conference with state government representatives here in which it had appealed for reduction of sales tax on aviation turbine fuel (ATF).

ATF cost amounts to an average of 35% of total operational cost of an Indian carrier.

Civil aviation minister Praful Patel briefed the Parliamentary Consultative Committee on Wednesday of the Andhra Pradesh government’s decision to slash the sales tax rates.

Summing up the overall activities of his ministry in 2007, he said the domestic passenger traffic had recorded a massive growth of over 32 per cent with the base of passenger traffic also reflecting a phenomenal increase.

Referring to the government decision to introduce a new category of scheduled airlines to promote regional connectivity, Patel said four carriers have been given the ‘no objection certificate’ to launch operations in this category.

These are Star Aviation for Southern Region, Jagson Airlines and MDLR Airlines for Northern Region and Zav Airways for Northeast/Eastern Region.

About the merger process of Air India and Indian, he said several working groups and an Integration Team were already operating to move the process forward.

A grievance redressal machinery and an inter-ministerial grievance redressal committee have been put in place to address employees’ grievances.

The merged entity, National Aviation Company of India Limited (Nacil), has already received 27 of the 111 aircraft it has ordered from Boeing and Airbus Industrie, Patel told the Committee, adding that the remaining aircraft would be delivered in phases by 2011.

He also informed the members that Air India, as a merged organisation, has been invited to join one of the largest grouping of global carriers — Star Alliance.

Air India would become a full-fledged member of this alliance next year on completion of its IT integration of various services like ticketing.

Patel said in-principle approvals have been granted for creating greenfield airports at Kannur in Kerala and Navi Mumbai. A proposal for creating an airport at Greater Noida near Delhi was under consideration of a Group of Ministers.

He also briefed the parliamentary panel that the government had recently amended the policy governing FDI in the civil aviation sector, which would boost investment.

Source : www.financialexpress.com,  dated 13/02/2008