The two main questions for the aviation sector In India are the high airline fares due and whether aviation turbine fuel (ATF) will be brought under the GST regime.
In an exclusive interview with CNBC-TV18, the Minister of Civil Aviation and Steel, Jyotiraditya Scindia, assured that both are being considered and worked upon by the government.
Scindia said that the aviation ministry has worked with state governments on decreasing value added tax (VAT) on ATF and thus reducing prices.
“We have worked assiduously with all state governments. There are two aspects to ATF. One, of course, is the issue of taking into goods and services tax (GST), but while that issue is being worked on with various ministries, we are still working and chipping away at the problem by going directly to states,” he said.
Currently, only eight states are still charging 20-30 percent VAT on ATF, as per the minister.
“We have had 16 state governments out of 22 that have moved from a 20 percent to 30 percent regime on VAT,” he said.
The aviation ministry is also working with the oil marketing companies (OMCs) to work out a mechanism to bring down the margin between crude oil price and ATF price.
Talking about the fare cap, Scindia said that it will be taken in the interest of the sector at the appropriate time.
“That is on my dashboard. I will not divulge when I propose to take a decision, but let me say that it will be taken in the interest of the sector at the appropriate time,” he said.
India’s aviation industry is starting to recover from the blow dealt by the pandemic (COVID-19). Airlines have also been reporting more than usual technical snags in the last year. According to the ministry, a total of 478 incidents were reported in the last year, until June. The aviation regulator, DGCA, has increased its surveillance of the sector.
Scindia assured that the aviation regulator was taking note and acting on the incidents and that safety was paramount.
Speaking about the expansion plans to match the growing demand of the country the aviation minister said, “Airport capacity has been doubled from 74 airports in 2013-14 to 141 now. We will have 220 airports by the end of this decade.”
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