Aviation min seeks uniform import duty on pvt aircraft

The civil aviation ministry has proposed a uniform import duty on private aircraft irrespective of whether it is used for private or unscheduled commercial operations. Currently, an aircraft imported for personal use attracts import duties between 19% and 21%, while one imported for commercial operations attracts duties of 2.5%-3% only, as the latter is not subject to countervailing duty and special additional duty, which are equivalents of taxes (like excise and VAT) on domestically manufactured items.

According to senior aviation ministry officials, the ministry has written to the finance ministry seeking a uniform levy for the aircraft imported under both categories and the new duty rate would be between the two prevailing rates. This means private jet imports would become cheaper while non-scheduled commercial operations would become a little more expensive.

?We have asked them (finance ministry) to average it out so that it doesn?t affect the revenues,? the aviation ministry official said.

While many corporates have been lobbying for a reduction in the taxes on import of private jets, the aviation ministry official said that the idea to merge the two categories was primarily to avoid policing on utilisation of these planes.

?It is very difficult to monitor the utilisation of these aircraft. There have been many cases in the past where even some of the big corporates have misused their aircraft obtained under non-scheduled operator?s permit for private travel. If there is one duty, there would be no issue pertaining to duty evasion,? the official added.

The official said aviation secretary KN Srivastava has met finance ministry officials to discuss the proposal.

Officials in the private jet industry said the uniform levy would be beneficial only if it is lower than the present levels. ?If there is an attempt to merge the categories and still keep it revenue neutral, then it is not going to benefit the sector. The import duty must come down,? Business Aircraft Operators? Association (BAOA) chairman and president Rohit Kapur said.