Put aviation sector in lowest slab of proposed GST

Private and Business jets operators' body BAOA today said that industry needs greater fiscal support from the government in view of the jet fuel prices expected to move northwards and demanded that the aviation sector be put in the lowest slab of the proposed GST regime.

The Goods and Services Tax (GST), which the government intends to roll out from April 1, 2017, is to subsume central excise, service tax and state VAT among other indirect levies on manufactured goods and services.

The GST Council has finalised a four-tier tax structure -- 5, 12, 18 and 28 per cent.

"Business Aircraft Operators Association (BAOA) expects the finalised GST structure to treat aviation in the most favourable way by classifying it in the lowest slab," the Association said in its budget wish-list to the Government today.

The lowest tax rates in the GST would help the industry optimally meet the ever growing demand from Indian public for affordable air travel options, it said.

"With ATF prices likely to go northwards due to the recent decision of OPEC to cap production output, the industry needs greater fiscal support from the government to optimally meet the ever growing demand from Indian public for affordable air travel options," it said.

BAOA, which claims to be the unified voice of business and general aviation, has, among others, Reliance Industries, Tata Group, Aditya Birla Group, DLF, and Essar Group as its members. As many as 78 non-scheduled operator permit holders are part of this grouping.

The Association, in report, titled Business Aviation in India, released early this month had said that business aviation in India continued to perform below its potential.

"In sharp contrast to the growth of scheduled airlines, business aviation has registered a meagre 2 per cent growth over the last 5 years...A vibrant business aviation industry would lead to overall economic prosperity by way of superior efficiencies and faster growth leading to new jobs and higher incomes," it has stated.

The report had also urged the Government to accord the business aviation industry its rightful place, and thereby reap manifold economic benefits.

Stating that the aviation sector in India remains most challenging due to high cost inputs in every activity, the Association today said it looks forward to government rationalising duty structure for all public air transportation system inclusively by not treating non-scheduled operators differently.

Date: 
Wednesday, 21 December, 2016
Publication: 
Business Standard