Only a few States such as Andhra Pradesh, Madhya Pradesh and Chhattisgarh have responded positively to the Centre’s appeal to reduce the sales tax on aviation turbine fuel (ATF).
Union Civil Aviation Minister P Ashok Gajapathiraju has said that the Centre wanted the States to reduce the ATF tax to bring down the burden on the aviation industry.
Asked whether the Centre suggested the quantum of reduction, the Minister said the Ministry had not indicated any number but expected the state governments to bring down the rates.
The Minister was talking to reporters here on Tuesday on the sidelines of the 65th annual general meeting and a conference on 'Indigenous development of civil and military aircraft'.
Sales tax on ATF is levied by the States. This goes up to as high as 40 per cent in some States, increasing the cost overheads of the airlines.
There was a demand from the industry to include ATF in the ‘declared goods’ category to bring down the tax rate to 4 per cent from 35-40 per cent in some States. “We don’t want to take away the right of the States,” the Minister said.