Higher levy on ATF like taxing an economic activity to death: Ashok Gajapathi Raju
New Delhi: Taking a dig at the Delhi government over its decision to levy higher tax on jet fuel, Union Minister Ashok Gajapathi Raju on November 20, said such a move would be like "taxing an economic activity to death".
ATF (Aviation Turbine Fuel) expenses make up a substantial part of the overall operational costs incurred by airlines. To bring down the costs, the Centre had earlier written to state governments asking them to reduce the value-added tax on ATF. Some state governments responded positively, while some did not, the Delhi government decided to enhance taxes on ATF, the Union Civil Aviation Minister said.
"Taxes are a reality, but taxing an economic activity to death, probably India shows the way in that... We need to come out of that scenario and go forward", Raju said here.
When asked about Raju's comments on Delhi government hiking tax on jet fuel, a Delhi government official said the decision was part of this year's Budget. Even after hiking the VAT on ATF to 25 per cent from 20 per cent, the rate is still among the lowest, the official added. On whether the Centre was looking to evolve a consensus among states with respect to taxation on ATF, the Minister replied in the negative.
"I am not trying to develop a consensus. You see a consensus would not be possible. Luckily for us, a large number of chief ministers agreed to my suggestion. There is one chief minister who has gone against it and said what the hell... I will increase. It is okay, it doesn't matter", Raju said.
He was speaking at an air cargo summit organised by industry body PHD Chamber here. About making taxation side of civil aviation sector a little more flexible, Raju said efforts would be made in this regard even as he added that usually the taxmen in the Finance Ministry are not pro-active and liberal.
"If you look at the political manifestos of all parties, regional and national, aviation will probably find a sentence in the BJP manifesto that too on regional connectivity.
"Somehow, aviation seems to have slipped from the political map. We need to bring it back", Raju noted.
To a query on whether his Ministry has reviewed aviation security in the wake of a recent bombing of a Russian aircraft, Raju said, "Indian skies as far as security is concerned are fairly safe".
On whether the Ministry has given preliminary approval for setting up an airport in Bhiwadi, Rajasthan, Raju did not offer any specific comment and only said, "we are not against (new) airports".
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