With major airlines facing debt turbulence, industry body ASSOCHAM, has called for lower taxes on jet fuel and liberal foreign investment norms.
“Airlines could suffer losses worth about Rs 15,000 crore in the current financial year with Air India alone likely to account for more than half of it,” said Mr D.S Rawat, Secretary General, Associated Chambers of Commerce and Industry.
The Government allows foreign investment of up to 49 per cent in Indian carriers. However, foreign airlines are not allowed to invest directly or indirectly in domestic carriers, a rule that should be scrapped for healthy growth of the sector, he said.
Also, airport charges must come down and ground handling operations need to be streamlined. Maintenance, repair and overhaul (MRO) facilities are subject to 10.3 per cent service tax. There is no import duty for foreign MRO companies from overseas suppliers but domestic players have to pay import duty of 30 to 40 per cent. In addition, there is 18.5 per cent minimum alternate tax on aerospace special economic zones which are coming up at Nagpur, Belgaum and Hyderabad, he added.