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Sales tax on ATF -- `Govt sympathetic towards AI plight'

Our Bureau

NEW DELHI, Aug. 10

THE Government is sympathetic towards the plight being faced by Air India as it is being forced to bear the burden of sales tax on aviation turbine fuel (ATF) while other foreign airlines have been exempted and is looking at providing relief in other way s to the national carrier, senior airline officials said here on Thursday.

``The Government is sympathetic and indications are that the airline may be compensated in other manners so that there is a level playing field for AI,'' senior officials of the airline said.

AI had petitioned the Ministry of Civil Aviation almost immediately after the Cabinet decision became known asking that some relief be provided to it.

While officials refused to specify what these remedial measures were, they did say that they had heard that the Government may extend the proposal of providing ATF at a rationalised sales tax regime of four per cent.

The Union Cabinet on Tuesday approved a proposal exempting foreign airline from paying sales tax on the ATF which they lift in India. However, AI officials felt that the Cabinet decision was highly ``discriminatory'' and against the national carrier.

``It seems highly unfair that of the 55 foreign airlines operating into India which have not paid the sales tax on ATF and have landed the oil companies in financial trouble, the Government decides to penalise AI which is paying all its taxes religiously ,'' airline sources said.

Officials said that the sales tax waiver will provide an unfair ``price discrimination'' to foreign airlines which AI will find difficult to match.

They pointed out the Cabinet decision will put an additional burden of close to Rs. 72 crores during this financial year alone on the airline. ``We are already suffering as some States like Delhi and Kerala raised the sales tax on ATF causing an addition al burden of almost Rs. 15 crores to the airline,'' senior officials said.