Budget expectations: Aviation sector

21 Jan 2022 , 03:58 PM

Civil aviation provides efficient infrastructure, critical for economic growth and employment in our country.

Yet civil aviation pays 21% of its revenues to the government in indirect taxes with very little input credit. It is an unreasonable proposition to expect that the industry should earn a 21% margin just to pay taxes to the Government. This unreasonable proposition is resulting in an industry that is chronically ill and is unable to live up to its true potential of boosting commerce and employment.

We would request the Ministry of Finance to take some immediate action to address this long festering problem. Central excise taxes on fuel should be reduced from 11% to 5%, ATF should be brought under the GST, custom duties on repair parts should be eliminated.

A rationalization 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.

The author of this article is Mr. Ronojoy Dutta, Whole Time Director and Chief Executive Officer, IndiGo

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com