It will soon be a lot tougher to operate a private jet in India, or even charter one from international operators. According to a civil aviation ministry official, any charter company wanting to operate in India or lease its aircraft out for private use must have a permanent establishment in the country.
That comes as bad news for international air charter operators, who usually fly in an aircraft from the nearest overseas base whenever a client places a request. For example, Netjets, partly owned by Warren Buffet (the largest air charter firm in the world), will not have any operations within India, but plans to offer its charters through Ashish Chordia-owned Shreyans, which markets Fendi and Porche in the country.
Companies like Vistajets and Execujets, among others, use fixed-base operations in Singapore, Malaysia, Hong Kong and the Middle East to service the Indian market. Execujets of Switzerland recently opened an office in Mumbai to market its services to India’s HNIs.
Sources estimate that such ad hoc operations by charter companies result in a loss of between Rs 800 and Rs 1,000 crore to the exchequer every year as these companies do not pay taxes or fees for operating in India. For their part, most operators feel the Indian market is too small to launch full-fledged operations.
Private and business aircraft also enjoy a much lower 4% sales tax on aviation turbine fuel, compared to larger commercial aircraft that pay 20-30%. ?We are looking into many of these discrepancies,? a government official said.
The private and business jets sector is already under scrutiny after it was found that many HNIs have imported aircraft under non-existent air charter companies to avoid paying 28% excise duty.