The Federation of Indian Chambers of Commerce and Industry (FICCI), on Wednesday, suggested that the Centre should take up with the States the need to reduce VAT on aviation turbine fuel to bring down the high operating costs of airlines.
Talking to reporters on the sidelines of the India Aviation show here, FICCI President Sidharth Birla said because of the high tax rate, the operating costs were high and artificially inflated. This was one aspect on which the government would have to take a call to keep the fuel costs at the international level. He also wanted the creation of a viable aviation infrastructure in Tier-II and Tier-III cities as there was lot of potential in smaller cities.
On allowing 49 per cent FDI by foreign airlines in Indian carriers, he said it was a good beginning.
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