IATA welcomes passing of AERA bill by Parliament

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Mumbai, Nov 3 (UNI) Reiterating the need for reasonable taxation on aviation sector in India, the International Air Transport Association (IATA) welcomed the passing of the Airport Economic Regulatory Authority (AERA) bill by Parliament on October 22.

IATA Director General and Chief Executive Officer Giovanni Bisignani, in a statement here, said, ''The global crisis in aviation is deepening with India as one of the epicenters with potential losses of USD 1.5 billion this year. AERA is a step in the right direction, but it is only part of the solution. There is a need for comprehensive policy approach to reverse the state of Indian air transport sector. And the most urgent is to address taxation, which is crippling the industry.'' AERA will ensure that India's aviation infrastructure meets cost-efficiency and service-level targets with charging policies in line with ICAO principles, including transparency, non-discrimination and user-consultation, he said.

''Timing is critical. First, the industry crisis makes cost-efficiency throughout the value chain more important than ever.

And second, the increased role of private-public partnerships for infrastructure developments requires both solid ground rules and the ability to enforce them,'' he said.

Now thatthe parliament has approved it, there is no time to waste in quickly setting-up and staffing the agency,'' he said.

He opined that though India has a seat on the ICAO Council many of the ICAO principles are being ignored by Delhi. ''There is a big gap to cover with little or no transparency in charges and differential pricing practices. Our best estimate is that the air navigation service provider over-collects by 20 per cent. And the 33 per cent price differential for international landings has no cost justification,'' the CEO said.

''The service tax on premium class tickets, air navigation charges, and landing and parking charges is contrary to ICAO's resolution, calling for a reduction of taxes. Taxing overflight charges also breaches India's international obligations,'' he pointed out.

''We welcome and commend the Ministry of Finance for scrapping the five per cent import duty on fuel, and hope the Ministry will quickly address all the other taxation issues, including the eight per cent excise duty. State governments must also understand that the situation is desperate, and deliver a fair solution on the excessive sales tax, which in some cases is as high as 30 per cent.

If not, they will need to share responsibility for the broader economic consequences of a failing industry,'' he added.

UNI JM RN AG1855

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