Union Finance Minister Nirmala Sitharaman recently said that the agenda of the next Council meeting would consist of bringing Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST). The FM said that the issue is not alone with the Centre, but it has to undergo the GST Council.
When the GST was introduced on 1st July 2017, five products, including crude oil, petrol, diesel, natural gas and ATF, were kept out of its purview, considering the revenue dependency of the Central and state governments on this sector.
In a post-Budget discussion with Assocham, the finance minister said that the Council will decide to include ATF in GST. The SpiceJet Founder Ajay Singh said that the oil is at USD 90, and the rupee is at 75 to a dollar. Therefore, the civil aviation sector has become extremely ill. The support from the Centre by bringing ATF into GST will be beneficial.
The Centre currently levies excise duty on ATF while state governments charge VAT. These taxes, with excise duty, have been raised periodically with rising oil prices. Including oil products in GST will help companies set off taxes that they paid on input and bring about uniformity in taxation on the fuels in the country.
In reply to the above, Sitharaman stated that it is not just a concern for the airline, but the current global fuel price is a concern for everyone. However, the airlines are affected more as they have not seen a full head-up post the pandemic. She also said that the ministry would talk with the banks to see what best can be done for the airline sector.
Ajay Singh pointed out that banks are withdrawing facilities for stressed sectors instead of helping them. So, he requested that putting these sectors under priority lending or infra category for two or three years would help the industry. He also stated that currently, the banks are not there when the sector needs them, but they are in industries that are doing well, creating a great deal of stress.
In her reply, FM reaffirmed that she understands serious problems. The Omicron has come in just as they thought the airline industry would revive. So, the states were being very cautious have brought in severe restrictions in people’s movement to curb the spread of the virus. Also, internationally the quarantine requirements are hurting the airline industry just at a time when it is likely to see a revival.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.