More urgent action on taxtion needed: IATA

Written by:
Subscribe to Oneindia News

New Delhi, Nov 4 (UNI) Welcoming the scrapping of five per cent customs duty on jet fuel, the International Air Transport Association (IATA) has asked the Finance Ministry to quickly address all other taxation issues, including the eight per cent excise duty on ATF, to help the aviation industry come out of the current crisis.

''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,'' IATA's Director General Giovanni Bisignani said in a statement.

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

He regretted that India was ignoring the ICAO principles of transparency, non-discrimination and user-consultation, even though it was on the ICAO Council.

''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,'' Mr Bisignani said.

He said the service tax on premium class tickets, air navigation charges, and landing and parking charges were contrary to ICAO's resolution calling for a reduction of taxes.

''Taxing overflight charges also breaches India's international obligations,'' he said.

The IATA chief welcomed the passing of the Airport Economic Regulatory Authority (AERA) Bill by Parliament, and said the Government should not waste any time in setting up and staffing the agency.

''The global crisis in aviation is deepening. India is one of the epicenters with potential losses of 1.5 billion dollars this year.

AERA is a step in the right direction, but it is only part of the solution.

''To help reverse the state of the Indian air transport sector, we need a comprehensive policy approach in addition to establishing AERA. The most urgent is to address taxation, which is crippling the industry,'' he said.


Please Wait while comments are loading...