After SpiceJet CMD Ajay Singh called for a 15 percent hike in airfares to offset fuel costs, low-cost carrier IndiGo on Thursday requested the government to bring Aviation Turbine Fuel (ATF) under Good and Service Tax (GST).
In a statement, IndiGo said, “To facilitate recovery of the aviation sector and to make flying viable for everyone, we would request the government to at least bring ATF under GST so that the benefit of the input tax credit can be availed.”
The airline said, “The constant increases in crude oil prices (today by 16.3 percent) and depreciation in the rupee, we believe that the situation is unfavorably impacting the aviation sector as it constitutes almost half of any airline’s operational costs. This is the tenth straight increase since the start of 2022.”
ATF, or jet fuel price, reached a record high after a price hike of 16.3 percent on Thursday. The cost of aviation has risen by 91 percent in the last six months and almost doubled in 2022.
In Delhi, ATF is priced at Rs 1.41 lakh per kilolitre. ATF rates in the national capital were raised by 5 percent earlier in May, bringing it to Rs 1.23 lakh per kilolitre.
“Recently, the Jharkhand government had slashed VAT on ATF to 4 percent from 20 percent. We believe measures such as these will help the aviation sector recover quickly,” IndiGo added.
A minimum of 10-15 percent increase in flight ticket prices is required to ensure operational costs are sustained better, Singh said in a statement.
“ATF prices have increased by more than 120 percent since June 2021, Singh said. “This massive increase is not sustainable and governments — central and state — need to take urgent action to reduce taxes on ATF that
Fuel prices in India skyrocketed in 2022, owing to supply concerns amid the ongoing Russia-Ukraine conflict and an increase in demand following the lifting of pandemic-related restrictions. More than 80 percent of India’s oil needs are met by imports from foreign countries.
