The aviation ministry of India has proposed to increase the excise duty on jet fuel to 14 per cent from the current 8 per cent in a new revised budget plan.
The Minister of State for Civil Aviation Mahesh Sharma told Parliament on Monday that it will allow direct import of ATF by Indian carriers as actual users, but has asked state governments to reduce Value Added Tax (VAT) on ATF.
The jet fuel makes for over 40 per cent of carriers’ operating expenses.
In addition, Sharma said the Centre has "permitted foreign airlines to participate up to 49 per cent in the equity of scheduled air transport undertaking" for reviving struggling civil aviation sector.
He said the government has also "allowed External Commercial Borrowings (ECB) for working capital requirement of airline industry for a period of one year subject to a total ceiling of 1 billion dollars".
Besides, he said, the Centre has given tax concessions for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civil aircraft.