Civil aviation ministry working on demand to bring jet fuel under GST, says  Civil aviation secretary Pradeep Singh Kharola
Civil aviation ministry working on demand to bring jet fuel under GST, says Civil aviation secretary Pradeep Singh Kharola
YouTube/WRI India

The civil aviation ministry is working on the airline industry's demand to bring Aviation Turbine Fuel (ATF) under the ambit of GST and has taken up the matter with the finance ministry, a senior official said on Friday.

Addressing a virtual event on global aviation and air cargo sector, civil aviation secretary Pradeep Singh Kharola also said the ministry has taken specific steps for optimum utilisation of the country's vast airspace, which would help international airlines overflying India as well as domestic carriers in saving costs.

ATF or jet fuel cost, which account for 45-55 per cent of an airline's operating expenses, in India is among the highest in the world and the industry has long been demanding that it should be brought under the Goods and Services Tax (GST) regime.

"We are working (on bringing ATF under the GST) and the matter has been taken up with the Ministry of Finance... It has to go to the GST Council. We are trying for that," Kharola said.

At the event organised by industry body PHDCCI, he also mentioned steps taken for optimum utilisation of the country's airspace.

As a result of these measures, both cargo and passenger airlines would be able to optimise the distance flown and save costs, he added.

"We have seen that a large part of economic sectors faced great hardship and that was true even for aviation. But I can say at least for Indian aviation, it also faced a lot of difficulties but it survived. And the major contributor was air freight and the cargo," Kharola said.

According to him, this shows the huge potential of air cargo, not only domestically but also internationally.

In his chief guest address, UAE Ambassador to India, Ahmed A R Albanna said, "We are working closely with the Indian side to further extend our strong civil aviation linkages and early resumption of scheduled flights under UAE-India air serviceS agreement (ASA)".

He said that prior to the COVID-19 crisis, there were 1,068 flights per week being operated by the airlines of the two countries under the ASA, which is currently not operational because of the travel restrictions due to the pandemic.

Of these, over 460 flights were being operated by the UAE, and another over 540 by the Indian carriers, he said.

He also said the UAE was among the first few countries with whom India signed a transport bubble or air bubble pact, which is a temporary arrangement with an intention to resume the air connectivity between the countries once the pandemic is over.

Under the agreement, which is a temporary arrangement, airlines are only allowed to carry passengers between the two countries and not beyond. India has put in place air bubble agreements with several countries in the aftermath of the COVID-19 pandemic, which led to a suspension of international flights.

Stating that the UAE government attaches the highest importance to international cooperation, he said, "We believe that the international community must come together to overcome the challenges by the pandemic outbreak and to recover from its effect".

The aviation industry is one of the vital pillars of the global socio-economic opportunity, and socio-economic growth and a vital one for economic developments, creating job opportunities, supporting tourism and local business and stimulating foreign investment and trade.

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Free Press Journal