LOWER TAX ON ATF

States asked to lower tax on ATF: Praful Patel 16 Dec 2008, 1424 hrs IST, PTI NEW DELHI: The Centre has asked state governments to lower local tax on aviation turbine fuel (ATF) to reduce operating costs of airlines, civil aviation minister Praful Patel said on Tuesday. Replying to supplementaries during Question Hour in Rajya Sabha, he said sales tax varies from 4% to 32% that has a cascading affect on fuel price. "We have asked states to look at the issue of reducing sales tax," he said. Patel defended the government's move to ask public sector oil companies to give grace time to private airlines Jet Airways and Kingfisher to clear fuel bills and repay amounts defaulted in instalments. "The measure taken is to support a sector... no incentive has to given to any particular airline," he said adding, the Government had not given any bailout package to the loss-making carriers. Soaring of international crude oil prices to an all-time high of USD 147 per barrel also led to a steep rise in jet fuel or ATF prices, putting enormous burden on airlines which were also faced with negative passenger growth due to global economic slowdown. "There is no question of government writing a cheque to any airline," he said adding, the support was extended to keep the industry viable. The aviation sector should not be looked as "elitist" but as another mode of transport and government could not have ignored its needs and watched it go to a situation from where it would have been very difficult to recover, he said. Patel hoped that airlines would cut fare now that ATF prices have fallen seven times in past three months.

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