Ajay Singh, owner of low-cost carrier Spicejet, on Friday, pitched for bringing aviation turbine fuel (ATF) under the ambit of goods and services tax (GST) to lower cost. The move will help bring down fares and boost the aviation sector’s growth, Singh said at the World Economic Forum’s India Economic Summit.
Bringing fuel under GST will help airlines claim input tax credit, which will help lower cost.
“In aviation cost, ATF is the biggest item. We want the ATF cost to be reduced. States should reduce sales tax and bring it within GST so that we can claim input tax credit. If that happens, prices will come down, fares will come down and the aviation sector will see growth,” said Singh at the conference organised in partnership with the Confederation of Indian Industry (CII).
On the states’ insistence, petroleum has been kept out of GST and hence continues to face the cascading effect of multiple taxes. However, certain petroleum products including cooking gas, kerosene and naptha are a part of GST.
He added that the sector is discussing the GST-related issues with the government.
“GST is a concern… these glitches would be sorted out over a period of time. We found that the government was very receptive to hearing ideas, so we are discussing it with them,” said Singh.
He added that for the sector to grow and compete globally, the taxes need to come down. “We cannot have the most expensive aviation sector in the world, the most expensive ATF in the world, the most expensive airports in the world… now we have added to that by putting GST which is a really large tax on all sorts of activities related to aviation,” said Singh.
The Spicejet co-founder also sought a reduction of red-tapism. “It takes so many permits to do anything… it is at every level. It is so complicated. I have lived in 13 countries and worked in over 60. And the two countries that has always been in my mind for … the hardest place to do business…India and Brazil.” It does not keep corruption out, it actually creates more corruption, Singh added.
Spicejet is also looking at buying at least 100 seaplanes in order to increase its reach in areas which do not have air strips. Seaplanes are fixed-wing aircrafts that can take off and land on both water and airfields.
