Business Line(25-06-2006)
http://www.thehindubusinessline.com/2006/06/25/stories/2006062502930100.htm
AI Express gets sales tax waiver on ATF
K.R. Srivats
New Delhi: Air India Express, the low cost airline from Air India, is expected
to see a drop in its fuel bill during the current fiscal, with the Finance
Ministry specifying that the aviation turbine fuel (ATF) for its international
flights would be considered as "deemed exports".
So , the airline would not be required to pay any sales tax to the States
.
Profit boost
AI officials indicated that the Finance Ministry move would help boost operating
profit of the low cost airline, as it would result in an annual savings of
between Rs 20 and Rs 25 crore, the estimated annual sales tax outgo of the
airline on fuel.
With a view to providing a level playing field to Indian carriers vis-à-vis
foreign airlines, the Central Government had, in 2005, taken powers to designate
the Indian carriers that would be entitled for sales tax exemption on the
ATF lifted for international flights.
Official sources said that Air India Express was the fifth Indian carrier
to be granted the facility, after AI, Indian Airlines, Jet Airways and Air
Sahara.
The decision to grant sales tax exemption on the ATF comes after a recommendation
by the Ministry of Civil Aviation. Air India Express started operations in
April 2005 with Boeing 737-800 aircraft.
The airline offers flights from various Indian cities to the Gulf and South-East
Asia.