Date:05/02/2008 URL: http://www.thehindubusinessline.com/2008/02/05/stories/2008020551761000.htm

Back Domestic air travel could become cheaper after Budget, says Patel

Our Bureau

New Delhi, Feb. 4

Domestic air travel could become cheaper after the presentation of the Union Budget 2008-09, the Minister for Civil Aviation, Mr Praful Patel, said here on Monday.

Speaking to newspersons on the sidelines of the 58th annual function of the Institute of Chartered Accountants of India, the Minister hoped after the presentation of the Union Budget there would be a rationalisation of taxes on aviation turbine fuel, which in turn could see domestic air fares dip.

Cut in sales tax on ATF?

“The Ministry is also in talks with State governments to reduce sales tax being imposed on ATF.

“A request has been made to the Finance Minister to consider steps in the Budget that would help bring down prices of ATF so that air travel becomes cheaper and the industry does not run into financial difficulties,” the Minister said.

At the moment, sales tax on ATF varies from 4 per cent to more than 30 per cent around the country, and oil accounts for between 40 per cent and 45 per cent of the operating cost of the domestic airlines.

Asked whether the Ministry was asking domestic airlines to reduce the fuel surcharge as global prices of ATF had declined marginally, Mr Patel said that the Government did not interfere in the pricing of air tickets.