Govt exempts excise responsibility on ATF purchases by Indian carriers for abroad flights, ET TravelWorld News, ET TravelWorld

Govt exempts excise duty on ATF purchases by Indian carriers for overseas flightsThe authorities has exempted home airways flying abroad from paying excise responsibility on Aviation Turbine Fuel ,ATF), bringing them at parity with worldwide carriers.

Airlines will, nevertheless, proceed to pay an 11 per cent excise responsibility on ATF used for flying plane domestically.

In a notification dated July 7, the finance ministry mentioned the exemption from each fundamental excise responsibility and particular further excise responsibility could be relevant retrospectively from July 1.

Domestic carriers flying overseas beforehand did not pay excise responsibility on ATF purchased from oil advertising and marketing corporations. But this exemption was seen as being withdrawn when the July 1 notification slapping an export responsibility on ATF alongside petrol and diesel was issued.

The aviation The trade approached the federal government citing oil corporations denying excise exemption to them since July 1.

According to CAPA India’s projections, Indian airways are unlikely to proceed with present fare ranges, particularly in Q2 and the removing of fare caps a lot larger losses for airways. The aviation consultancy additionally predicted that Indian airport operators are anticipated to report a modest revenue of USD 420 million in FY23.

The finance ministry’s clarification that excise responsibility wouldn’t be relevant on home carriers for international flights brings them again at par with international airways for which the gasoline is exempt from responsibility as per the Chicago conference.

KPMG Tax Partner Abhishek Jain mentioned, “the potential levy of excise duty on ATF supplies to a foreign going aircraft has proactively been exempted by the government, with no excise duty (basic or special) being applicable on such supplies.

“This alignment to the taxability as existent pre-imposition of excise responsibility on exports is a a lot welcome transfer for the airline trade, particularly within the backdrop of accelerating ATF prices,” Jain added.

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