Patel welcomes reduction in ATF duties for regional jets

New Delhi, Feb 28 (UNI) Civil aviation minister Praful Patel today welcomed the budget for 2007-08 which has proposed duty reduction on air turbine fuel (ATF) on smaller new generation aircraft to keep in tune with turboprop aircraft.

''It will truly give fillip to connecting smaller towns and cities,'' he said.

In 2001, ATF sold to turboprops was included in the list of declared goods under section 14 of the Central Sales Tax Act.

Turboprop aircraft have now been replaced by new generation small planes which have taken air services to remote parts of the country.

Finance Minister P Chidambaram proposed to amend the provision to cover all small aircraft with maximum takeoff mass of less than 40,000 kg operated by scheduled airlines.

ATF is the single highest cost element for airline companies accounting for over 40 per cent of their total costs. While the central excise duty on ATF is 8 per cent, the sales tax component varies from state to state between four to 39 per cent.

The newly-formed Federation of Indian Airlines (FIA) has been demanding that it be fixed at four per cent for all regional jets that is currently charged for turboprop aircraft.

More UNI