Excerpt From http://economictimes.indiatimes.com/articleshow/msid-1017498,curpg-2.cms
Give wings, will fly TEAM ET TIMES NEWS NETWORK[ FRIDAY, FEBRUARY 11, 2005 12:12:15 AM] ... .... .... ... .... .... Sales tax levied by different states on Aviation Turbine Fuel (ATF) is another irritant the industry wants taken care of. While the tax, which goes as high as 30% in some states, is a state subject,** the Centre can place jet fuel under the deemed import category and levy a nominal duty of 4%.** This will lower costs and bring uniformity in the fuel pricing. The fuel bill typically accounts for 25-30% of the operational costs of airlines. International oil prices have touched all-time highs in the past six months, resulting in very high jet fuel prices. Any concession would therefore give much needed relief to the airlines. VAT may also bring some relief to airlines but it will depend on the rate that is finally fixed. **The 10% service tax on landing and navigation costs is also been viewed with concern by the industry.** Once again last year, A-I had estimated a hike in its expenditure by some Rs 35 crore while the impact on IA was projected at Rs 28 crore. In developed markets like Europe and the US, budget carriers are able to fly to cheaper airports, which are alternate to the main hubs, and contract cheaper fuel, which also help in lowering costs, unlike India where these components are more or less fixed for all airlines. While the PM has committed resources to upgrade airports across the country as part of the government's focus on infrastructure development, a specific direction in the budget will help, analysts say. Airlines are gearing up to introduce more flights in the domestic skies as well as mount more inter-continental services. There is already a 30-40% increase in capacity last year, and more is on the cards. Airlines fear the biggest hinderance to their grow-fast programme will be inadequate infrastructure (read inability of Indian airports to handle the rush). While the civil aviation ministry is already drawing the blueprint to infuse more capacity, precious time may be lost in bureacratic procedures, and **India may lose out once more.** -------------------- Ditto for Goa? Phil Thomas Ribandar
