Aviation ministry for shifting ATF to declared goods list

New Delhi: The civil aviation ministry has moved a Cabinet note on civil aviation policy in which it proposed, among other things, shifting aviation turbine fuel (ATF) to the declared goods category. The ministry believes that the proposed status would reduce the sales tax incidence on the fuel, which is currently as high as 39% in some states, and thereby bring down the cost of airline operations. Under the Central Sales Tax (CST) Act, a declared good will not attract sales tax at more than 4%. In the Budget 2006, LPG was proposed to be made a declared good, with a view to “moderating” its price.
Currently, ATF accounts for 35-40% of the cost of an air ticket in the domestic sector. Besides the varying and normally high sales tax (ATF is outside Vat), there is an 8% central excise duty on the aviation fuel. ATF prices are highly volatile and the tax incidence is reckoned to be high by the ministry.
05/05/06 Financial Express

To Read the News in full at Source, Click the Headline