Nagar The aviation ministry is exploring several options to mitigate the impact of the West Asia conflict on airline companies. One option in this is to work with state governments to reduce the tax imposed on aviation fuel (ATF). The West Asia conflict began on 28 February. After that, the operating costs of airline companies have increased due to restrictions on airspace. A high-level source said the ministry is considering several options as part of larger efforts to mitigate the impact of the Middle East conflict on airlines.
Of. Rammohan Naidu started talks with state governments
Civil Aviation Minister K. Rammohan Naidu and the ministry have initiated discussions with chief ministers and state governments on the possibility of reducing taxes on jet fuel. ATF accounts for about 40 percent of an airline’s total operating costs. There is different VAT on Aviation Turbine Fuel (ATF) in different states. For example, in Delhi the VAT on ATF is 25 per cent whereas in neighboring Uttar Pradesh it is only 1 per cent. Due to the ongoing tension in West Asia, airline companies have also reduced their services to such countries where they have to use long routes to reach them.
Government reduced excise duty on petrol and diesel
Amid rising oil prices, the government has reduced excise duty on petrol and diesel this week. Special additional excise duty on export of diesel and ATF has been increased. This step has been taken with the aim of giving priority to their domestic availability. According to a highly placed source, the Directorate General of Civil Aviation (DGCA) is in touch with counterparts in other countries regarding the situation in West Asia. DGCA chief Faiz Ahmed Kidwai had said on March 26 that airline companies were facing major challenges and their operating costs were increasing. He expressed hope that the situation would improve further.