The central government may soon propose a formula or strategy to bring the Aviation Turbine Fuel (ATF) under the scope of the Goods and Services Tax (GST) law.
The government’s proposal will likely levy an 18% GST over and above the VAT or excise rate. If accepted by all states, the formula will be introduced, as reported to CNBC TV-18 by a senior government official.
Under the formula, the central excise rate or VAT rate may vary from state to state. It was reported that it had been international practice by many countries to levy GST in addition to the VAT or excise for ATF.
At the upcoming GST Council meeting, the government’s proposal may be presented before states and the Union Territories.
The Central Board of Indirect Taxes and Customs (CBIC) has studied and examined the proposal for including the ATF under GST. The GST Council will be briefed about the international best practice model to allow the Council to decide.
The development is seen when the ATF prices have risen to all-time high levels in India. The prices have increased by 5.2% on 16th February due to a rise in the international oil prices.
It is observed as the fourth hike in the ATF or jet fuel prices within two months due to a spike in international oil prices. However, the diesel and petrol prices remained unaffected for the 103rd consecutive day, when state elections were scheduled in Uttar Pradesh and Punjab.
The government has increased the ATF price by Rs.4,481.63 per kilolitre or 5.2%. The current new all-time high prices are Rs.90,519.79 per kilolitre in Delhi, as per the price notification of fuel retailers owned by the state governments. The last time the prices rose to more than Rs.71,028.26 per kilolitre was August 2008. The global crude oil prices reached the level of USD 147 per barrel.
The rise in ATF price will pressure the currently stressed airlines balance sheets. The industry is yet to resume full-fledged operations due to the ongoing restrictions on the pandemic.
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Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.