Indigo chief calls for aviation fuel rationalisation, says it will result in explosive growth

Civil aviation provides efficient infrastructure, critical for economic growth and employment in our country. Yet civil aviation pays 21% of its revenues to the government in indirect taxes with very little input credit, Indigo chief Ronojoy Dutta said in a statement released on Wednesday while criticizing the revenues being paid to the centre by the aviation industry.

It is an unreasonable proposition to expect that the industry should earn a 21% margin just to pay taxes to the government, the chief said.

Calling it an unreasonable proposition, the Indigo chief further said that this unreasonable proposition is resulting in an industry that is chronically ill and is unable to live up to its true potential of boosting commerce and employment.

"We would request the Ministry of Finance to take some immediate action to address this long-festering problem. Central excise taxes on fuel should be reduced from 11% to 5%, ATF should be brought under the GST, custom duties on repair parts should be eliminated," he added.

Emphasising the need to rationalise tax rates on jet fuel Dutta said that rationalization of taxes will result in explosive growth for aviation, which will have multiplier effects throughout the economy, stimulating commerce and employment and integrating the different regions of our diverse country closer together.

Aviation turbine fuel (ATF) cost is a significant component of the operational expenses of carriers and the civil aviation ministry has been pitching for lower rates in order to boost the airline industry that has also been adversely hit by the coronavirus pandemic.