Aviation industry wants tax sops

Ahead of the upcoming Union Budget, the aviation sector is hopeful that the finance minister announces measures favourable for the industry to help it tide over the difficulties created by COVID-19 such as tax sops. Credit rating agency ICRA Ltd had said in a December report that Indian airlines are expected to post a net loss of Rs 21,000 crore this fiscal year.

According to the sources, some of the measures that the government is planning to bring in order to improve the situation is to incorporate aviation turbine fuel under the goods and services tax (GST) regime, reducing airport charges, overflight fees, and excise duty on fuel, as well as extending lower rate for withholding taxes.

“This budget should focus on extension of lower rate on withholding taxes, which was decreased to 25% of the standard rate. This should be extended for another year till the market has fully recovered as it will help increase liquidity. Another area of focus should be the lowering of the income tax rate for travel companies,” Kanika Tekriwal, chief executive and founder of JetSetGo Aviation.

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