India calls for aviation fuel in GST
India's government aims to include aviation turbine fuel (ATF) in the list of products within the proposed goods and services tax (GST).
Its inclusion will ensure a uniform tax on the aviation fuel across all states, which at present is particularly high, reaching the 30% mark.
The country's jet fuel is nearly 60% higher than others and represents 40-50% of an airline's operating costs.
'We want jet fuel to be part of the GST. This will reduce taxes on the fuel by a huge margin and at one stroke, make aviation profitable in this country,' said aviation ministry officials.
If implemented, the GST programme will replace multiple state and central levies with a single tax regime.
Between March 2013 and March 2014, India's top five domestic airlines reported combined losses of Rs 9,737 crore, up 85% from the previous year.
Robin Pathak, aviation analyst and former Indian Airlines director, says: 'Most of the losses were because of a spike in jet fuel prices and a huge fall in the value of the rupee. The two factors drove down profitability for the entire industry.'