States to consider reducing tax on ATF

New Delhi, Jan 18 (UNI) Maharashtra, Andhra Pradesh and Kerala today said they would consider Civil Aviation Minister Praful Patel's appeal to rationalise the sales tax on aviation turbine fuel (ATF), which increases the jet fuel prices impinging upon the airline industry.

Participating in the first-ever national conference on civil aviation, representatives of these state governments said they would consider the appeal to rationalise the tax structure.

While Kerala Minister M Vijayakumar said the state government was considering reduction in sales tax on ATF, his Andhra Pradesh counterpart M V Ramana Rao said discussions in this regard were being held at the Chief Minister's level.

Maharashtra Secretary (Special Projects) Sanjay Ubale said he would raise the issue with the state government.

In a letter to all Chief Ministers, Mr Patel had asked them to reduce sales tax on ATF to four per cent, saying the Centre wanted to ensure that the airline industry remained viable and functional.

Stating that the tax burden on ATF ranged from four to 34 per cent, he specifically mentioned Maharashtra, Delhi, Kerala, Tamil Nadu, Andhra Pradesh, West Bengal and Goa for having high rates of taxes on jet fuel.

At the conference, he again asked State governments to rationalise their taxation policy on jet fuel and land acquisition practices.

''States must not look at aviation as a milching cow...,'' he said and added that the reduction in sales tax would encourage more airlines to fly into a state, resulting in the creation of aviation as well as tourism infrastructure.

UNI YJ SBA RK2010