Delhi govt to consider sales tax cut on ATF: CM

January, 16th 2009
The Delhi government would consider reducing sales tax on jet fuel as was being sought by the cash-strapped airline industry, Chief Minister Sheila Dikshit said on Friday.
Her comments came at a seminar on aviation when Kingfisher Airlines chief Vijay Mallya urged her to consider reducing the tax on aviation turbine fuel to four per cent -- a demand backed by Civil Aviation Secretary M Madhavan Nambiar, who was also present.
"I am not promising you anything. But let me see how we can help you. I have been informed that the (tax has been reduced in Mumbai, Hyderabad and some other places). I will try to do that but let me see how we can do it," Dikshit said in an impromptu response.
Some such steps were required to be taken as Delhi had become a hub for international passengers and enjoyed a high load of domestic air traffic, the Chief Minister said.
The current sales tax on ATF is 20 per cent in Delhi, which accounts for almost 25 per cent of the total passenger traffic in India. The airlines do almost 20 per cent of the total fuel tankering from the national capital and industry sources believe this could rise to 25 per cent or more if the tax rates are slashed.
The Delhi government had last year asked airlines to give a detailed note on how much fuel intake would rise if the taxes were reduced. The prime concern of the state government is to see that its revenue generation potential is not affected by the tax cut.