Patel, Ambika meet PM to discuss budget proposals

New Delhi, Mar 13 (UNI) Civil Aviation Minister Praful Patel today met Prime Minister Manmohan Singh alongwith Tourism Minister Ambika Soni and asked him to modify some proposals mentioned in the Union Budget for 2007-08.

Airlines have been demanding that the government retains aircraft lease payments outside the tax net, cut aviation fuel tariff and provide tax relief to immigrant pilots.

The withholding tax, which requires airlines to withhold the tax liability from leasing companies and pay it over to the government, has been kept in abeyance for several years. It is due to expire on March 31.

The Budget prepared by Finance Minister P Chidambaram does not mention of exemption being extended further. The withdrawal of exemption on withholding tax on lease rentals will increase the cost of local airlines as leasing firms typically passed on the liability to lessees.

With Indian air travel market expanding rapidly and a number of airlines being floated, the demand for leasing aircraft has risen sharply.

Mr Patel also urged the prime minister to cut taxes on aviation turbine fuel (ATF) which are much higher than international levels.

''I'm unhappy with state oil companies for not doing enough to reduce ATF prices which are hurting the entire aviation industry,'' the minister told reporters in the evening.

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