With “high taxes” on aviation turbine fuel (ATF) having become an “impediment” to aviation growth, Union Civil Aviation Minister Ashok Gajapathy Raju asked the Karnataka government to reduce its taxes.
Currently, Karnataka imposes a Sales Tax of 28 per cent on ATF – making it among the highest in the country. Neighbouring Andhra Pradesh, for instance, has just a 1 per cent ATF tax.
“Taxes account to 40 per cent of the airline’s costs, and are an impediment to MRO (Maintenance, Repair and Overhaul) activity… We need to simplify the tax structure to make the sector attractive," said the Minister during the launch of operations of the Bengaluru-based regional airline, Air Pegasus, here on Sunday. He said the Centre has written to Chief Ministers urging them to reduce taxes in their state.
Mr. Raju iterated that regional airlines and connections to smaller airports was a “priority” for the government.
When asked about the Kalaburagi Greenfield airport – which has stalled after the private developed pulled out of the project – the Minister said Airport Authorities of India (AAI) can take up the works if it is handed over by the state “without impediments and liabilities”.