Budget disappointing for airlines

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Mumbai, Feb 29 (UNI) GoAir Managing Director Jeh Wadia today said that the Union Budget has disappointed as the airline operators have not been given any tax breaks.

''The sales tax on ATF at 29 per cent on average still remains the same for airlines using large aircraft. It should be noted that all the low cost airlines in India use large aircraft to service the common man. However, the ATF for smaller aircraft has remained a declared good at 4 per cent. It should be noted that these smaller aircraft are used to service the upper class passengers by full service airlines,'' he said.

Moreover, custom duties and excise tax still remain prevalent in ATF. Withholding tax on leases remains between 11 per cent to 92 per cent while witholding tax on interest remains between 5 per cent to 20 per cent. Fringe benefit tax on hotel expenses, transportation, uniforms, travel and meals for the staff of airlines remains high at 6.80 per cent while service tax on loading, navigation and other airport charges have been retained at 12.36 per cent, Mr Wadia pointed out.

''On the brighter side, the proposed increased spending on agriculture and rural areas will help low cost airlines in India to gain a larger customer base. This is primarily because, as disposable income at grassroots level increase, the population will follow the general trend of upgrading their travel habits from bus to rail to air,'' he said.

''However, we feel that all of us in the Indian aviation sector need to continue our efforts to make the government feel and realise that there is an urgent need to bring the cost of operations in the Indian aviation sector at par with international standards and the biggest enabler to achieve this is reductions in taxes,'' Mr Wadia added.


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