Ahead of the announcement of the Union Budget, the aviation sector wants the government to streamline various tax structures so that airlines can reap benefits.
The Federation of Indian Airlines (FIA), of which all the India-based airlines are members, have submitted a memorandum to the finance ministry on February 6, asking the government to include ATF in the ?declared goods? category so that it attracts a uniform sales tax of 4% across the country.
Major airlines, including Jet Airways and Deccan, posted huge losses in the third quarter of this fiscal. Officials of these airlines attributed the losses to high ATF prices and excessive aircraft landing and parking charges imposed by the government on the sector.
It may be recalled that the FIA had also asked the government last year to declare a uniform sales tax on ATF, which is priced nearly 70-90% higher than what it is across the globe.
The second most important demand for the sector is an exemption of tax for a period of 36 months for expat pilots from the date of arrival in India. ?Tax exemptions would help the industry to attract foreign pilots till the time local talent is developed, ?said Jet Airways CEO Wolfgang Prock Schaeur, adding that the airlines had been facing a crunch pf pilots since all of them were on a fleet-expansion spree.
Other issues which the airlines want the government to consider include the removal of service tax on landing and airport and air navigation fees as it reduces domestic companies? competitiveness against other foreign airlines.
The airlines have demanded that expenses on the crew such as hotel accommodations should not be considered fringe benefits. ?When the aircraft are parked at various airports, the crew needs to be accommodated in a hotel. The hotel accommodation provided for crew cannot be considered fringe benefits, as it is an operating expenditure for airlines,? adds Prock-Schaeur.