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Budget 2016: Arun Jaitley makes flying more expensive, hikes excise duty to 14%

Wed March 02 2016, 7:23 am
  • Delhi High Court today sought the Centre's reply on a plea seeking capping of airfares across the country so that flyers are not fleeced by airlines. (Reuters)

  • Budget 2016: The excise duty on Aviation Turbine Fuel (ATF) is to be hiked to 14 per cent from 8 per cent, according to a proposal in Union Budget 2016-17. Arun Jaitley said , "Excise duty on ATF, other than for supply to Scheduled Commuter Airlines (SCA) from the Regional Connectivity Scheme Airports, (is) being increased. ATF for supply to aircraft under the Regional Connectivity Scheme will continue to attract 8 per cent excise duty". (Image Source: Reuters)

  • Budget 2016: Besides, 0.5 per cent cess on all taxable services would add to the cost of an air ticket. Krishi Kalyan Cess would be levied on all taxable services from June 1, 2016, and the proceeds would be utilised to improve agriculture. (Image Source: Reuters)

  • Budget 2016: Arun Jaitley's latest hike in excise duty comes at a time when airlines were seeking lower levy on jet fuel, which accounts for more than 40 per cent of their total operating expenses. "Increase in excise duty on ATF will make the raw material costlier by around 4-5 per cent. At a time when ATF in India is 60-70 per cent costlier than global ATF prices, it goes against the government's stated objective to make flying affordable for the masses", Amber Dubey, partner and head-aerospace and defence at global consultancy KPMG said. (Image Source: Reuters)

  • Budget 2016: "The significant hike in excise duty on ATF will add to the high cost-environment for airlines in India," global airlines body International Air Transport (IATA) said in a statement. (Image Source: Reuters)

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