Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
News18 » Business
2-min read

Oil Companies Flag Roadblocks in Rationalising Taxes on Jet Fuel

The Ministry of Civil Aviation had formed a committee to develop a direct-billing mechanism between airline companies and airport operators so that these multiple taxes can be removed.

PTI

Updated:September 8, 2019, 4:16 PM IST
facebookTwitterskypewhatsapp
Oil Companies Flag Roadblocks in Rationalising Taxes on Jet Fuel
(Image for Representation, Reuters)
Loading...

New Delhi: Oil marketing companies have cited issues like sales tax as a barrier to the Civil Aviation Ministry's plan to rationalise additional charges that airlines have to pay while uplifting aviation turbine fuel (ATF) at airports across India, officials said.

Currently, airlines have to pay taxes for certain services, such as 'throughput charges', 'into-plane charges' and 'fuel-infrastructure charges' when they take the ATF at any airport for their planes. "These charges are taxed multiple times as they are billed in a circuitous manner," a senior government official said.

A second official said the Ministry of Civil Aviation had formed a committee to develop a direct-billing mechanism between airline companies and airport operators so that these multiple taxes can be removed. The committee comprises representatives from airlines, airport operators, oil marketing companies (OMCs), other service providers among others.

According to government estimates, if a direct-billing mechanism is implemented, airlines would be able to save around Rs 400 crore per year. In India, ATF accounts for almost 40 per cent of any airline's total expenditure. Therefore, any taxation on ATF always has a huge impact on airline companies.

"The OMCs have told us that there are certain provisions in the sales tax regime at the state-level, as well as in the excise tax regime, which may prevent direct billing," the official said.

During one of the meetings of the committee, the official said, the OMCs -- Indian Oil, Hindustan Petroleum and Bharat Petroleum -- stated that the state governments would be reluctant to let go of the tax revenues that come from the circuitous billing. The official said the committee was expected to submit its report soon.

Explaining the matter, the first official quoted above said: "Take the example of billing for throughput charges, which is done by the airport operator to the oil company.

"In turn, oil company passes on the charges by billing airlines. However, due to such convoluted billing process, taxes such as GST and excise duty and VAT is added on to throughput charges."

The official said that at the Delhi airport, if the throughput charges levied by the airport operator is only Rs 100, the airline ends up paying Rs 164 as it is paying "tax on tax", which includes the goods and services tax (GST), excise duty and value-added tax (VAT).

According to the official, had the throughput charges been invoiced directly by the airport operators to the airlines, the latter would have got the input tax credit for the GST paid and there would be no application of excise duty or VAT.

"The other charges -- fuel infrastructure charges and into-plane charges -- are also being billed similarly in circuitous manner, leading to tax on tax," the official said.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwitterskypewhatsapp
Most Active
Company Price Change %Gain
Yes Bank 64.10 -1.54
Maruti Suzuki 6,095.05 -0.58
BPCL 382.10 3.62
HDFC 1,988.30 -0.40
Reliance 1,205.70 0.69
Company Price Change %Gain
Maruti Suzuki 6,093.55 -0.61
Yes Bank 64.10 -1.61
ICICI Bank 399.15 -0.36
HDFC 1,988.75 -0.39
Tata Motors 121.85 -0.08
Top Gainers
Company Price Change %Gain
BPCL 382.10 3.62
Tata Steel 358.25 3.86
Vedanta 149.70 2.96
JSW Steel 221.40 2.41
SBI 280.40 2.35
Company Price Change %Gain
Tata Steel 358.05 3.95
Vedanta 149.45 2.68
SBI 280.50 2.41
Bajaj Finance 3,415.05 1.47
M&M 529.40 1.39
Top Losers
Company Price Change %Gain
Britannia 2,613.85 -2.92
Coal India 192.35 -2.66
ONGC 126.40 -2.54
Eicher Motors 16,030.40 -1.56
Yes Bank 64.10 -1.54
Company Price Change %Gain
Coal India 192.50 -2.58
ONGC 127.00 -2.08
Yes Bank 64.10 -1.61
Bharti Airtel 335.75 -1.21
HDFC Bank 2,186.95 -0.98

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results