<p>Niti Aayog has recommended to the government to cut excise duty on jet fuel to bring down high cost of flying, especially through metropolitan airports.<br /><br />“Align excise duties on aviation turbine fuel to international levels to bring down its cost. On average, ATF accounts for about 40% of airlines’ total costs, making up the majority of airlines costs,” the Centre’s policy think tank said in its next three years agenda.<br /><br />The agenda was sought by Prime Minister’s Office.<br /><br />Jet fuel costs are among the world’s highest in India. <br /><br />“The high cost is exacerbated by a host of duties and taxes. Airlines pay an excise duty of 14% and a VAT ranging between 5% and 30%. Thus, the total effective tax on jet fuel is between 19% and 44%,” the Three Year Action Agenda 2017-18 to 2019-20 said.<br /><br />The Aayog also sought to reverse the new civil aviation policy that proposes to extend the hybrid till model for determining airport charges to state-run airports, saying it will raise costs for airlines and passengers.<br /><br />Currently, Public Private Partnership (PPP) airports in India –Delhi, Mumbai, Bengaluru and Hyderabad – operate under a hybrid till mode, where aeronautical revenue (landing, parking and ground handling) and a share of the non-aeronautical (duty free shops, hotels, restaurants and airport infrastructure) revenue are used to determine tariffs.<br /><br />In contrast, Airports Authority of India (AAI) airports operate under a single till structure where all revenues – aeronautical and non-aeronautical – determine tariffs.<br /><br />The Ministry of Civil Aviation has mandated that all airports now move from a single to a hybrid till structure.<br />Conventionally, a single till structure is associated with lower tariffs.<br /></p>
<p>Niti Aayog has recommended to the government to cut excise duty on jet fuel to bring down high cost of flying, especially through metropolitan airports.<br /><br />“Align excise duties on aviation turbine fuel to international levels to bring down its cost. On average, ATF accounts for about 40% of airlines’ total costs, making up the majority of airlines costs,” the Centre’s policy think tank said in its next three years agenda.<br /><br />The agenda was sought by Prime Minister’s Office.<br /><br />Jet fuel costs are among the world’s highest in India. <br /><br />“The high cost is exacerbated by a host of duties and taxes. Airlines pay an excise duty of 14% and a VAT ranging between 5% and 30%. Thus, the total effective tax on jet fuel is between 19% and 44%,” the Three Year Action Agenda 2017-18 to 2019-20 said.<br /><br />The Aayog also sought to reverse the new civil aviation policy that proposes to extend the hybrid till model for determining airport charges to state-run airports, saying it will raise costs for airlines and passengers.<br /><br />Currently, Public Private Partnership (PPP) airports in India –Delhi, Mumbai, Bengaluru and Hyderabad – operate under a hybrid till mode, where aeronautical revenue (landing, parking and ground handling) and a share of the non-aeronautical (duty free shops, hotels, restaurants and airport infrastructure) revenue are used to determine tariffs.<br /><br />In contrast, Airports Authority of India (AAI) airports operate under a single till structure where all revenues – aeronautical and non-aeronautical – determine tariffs.<br /><br />The Ministry of Civil Aviation has mandated that all airports now move from a single to a hybrid till structure.<br />Conventionally, a single till structure is associated with lower tariffs.<br /></p>
