The Federation of Indian Airlines, the apex body of various carriers, has decided to represent to Union Finance Minister Pranab Mukherjee to drop the move to levy 10 per cent service tax on domestic travel, as also the move to hike the excise duty on petroleum products.
No decision on price hike
The decision was taken at a meeting of the managements of various airlines held here as part of ‘India Aviation-2010,' which began on Wednesday. However, no decision was taken on fare increase.
Talking to journalists, IndiGo president Aditya Ghosh said a decision would be taken after representing the matter to the Finance Minister.
He said fares should be lower and remain at the current levels. Whenever the fares were hiked, the demand fell in the past, he pointed out.
Kingfisher Airlines chairman Vijay Mallya and Jet Airways chairman Naresh Goyal said the fares might have to be hiked and that they were evaluating the impact of the service tax proposal.
Air India Chairman and Managing Director Arvind Jadhav said it had to be seen as to how much of the proposal could be absorbed or else the fares would have to be increased.
Paramount Airways managing director M. Thiagarajan said his airline would be forced to pass on the 10 per cent levy of service tax to the customer. He urged the government to consider rolling it back.
The hike in excise duty on petroleum products would definitely lead to increased fares. As Confederation of Indian Industry's Aviation Committee chairman, he would take up the issue with the Finance Ministry.
The Federation of Indian Airlines also wanted the Aviation Turbine Fuel declared notified goods so that it attracts uniform sales tax of 4 per cent throughout the country.