The aviation sector in the country is ‘chronically ill’ because of high taxation and the government must extend relief on fuel and custom duties to unleash explosive growth, IndiGo’s CEO Ronojoy Dutta said on Wednesday.
“Airlines pay 21% of their revenues to the government in indirect taxes with very little input credit. It is a very unreasonable proposition that an airline should earn a 21% margin just to pay taxes,” Mr. Dutta said in a press statement.
He requested the Ministry of Finance to take some ‘immediate’ measures to address the ‘long festering problem’ and recommended that Central excise taxes on fuel be reduced from 11% to 5%, and aviation turbine fuel be brought under the GST. He also demanded that custom duties on repair parts be removed.
“ A rationalisation of taxes will result in explosive growth for aviation, which will have multiplier effects throughout the economy, stimulating commerce and employment and integrating the different regions of our diverse country closer together,” he said.
