New Delhi: The Centre has decided to debate on the inclusion of aviation turbine fuel (ATF) under the purview of the goods and services tax (GST) in the next Council meeting, Finance Minister Nirmala Sitharaman has said.
Sitharaman, while interacting with industry body Assocham, has said that the GST council in its next meeting will take up the issue, adding that the rising global fuel price is a concern.
She said, “It is not with ... (the Centre) alone, it has got to go to the GST Council. The next time we meet in the Council, I will put it on the table for them to discuss it.”
On July 1, 2017, when the GST was introduced, five commodities – crude oil, natural gas, petrol, diesel, and ATF – were kept out of its purview given the revenue dependence of the central and state governments on this sector.
The finance minister was responding to views expressed by SpiceJet Founder Ajay Singh where he sought the support of the government in bringing ATF into the GST regime.
“Oil is at $90, the rupee is at 75 to a dollar, and therefore, the civil aviation sector has become chronically ill. Your kind support (in bringing ATF into the GST) in this process will be extremely helpful,” Singh said.
The government now levies excise duty on ATF, while state governments charge VAT. These taxes, with excise duty, have been raised periodically with rising oil prices.
Including oil products in the GST will not just help companies set off tax that they paid on input but will also bring about uniformity in taxation on the fuels in India.
Sitharaman said, “Of course just not for the airline but the global fuel price is now a concern for all of us, more so for airlines which have not seen a complete head-up post the pandemic,” adding that she will speak with the banks to see what best can be done for the airline sector.
“You also spoke about the industry status to be given so that can help to attain better banking assistance. I will have a word with banks on that,” the finance minister said.