Civil aviation policy to be announced next month

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Hyderabad, March 16 (IANS) The much-awaited civil aviation policy is expected to be announced next month, Civil Aviation Minister Ashok Gajapathi Raju said on Wednesday.

“We are working on the policy. It is in an advanced stage. We are hopeful that by April the policy will be out,” he told reporters at India Aviation 2016, the country’s largest civil aviation conference and exhibition which began here.

Raju said for the first time, the policy was put in public domain and suggestions were called for. “Suggestions emerged. We are also seeking guidance from senior ministers in the government of India. There are 22 items. The will be implications. Growth definitely has its implications,” he said.

On prices of Aviation Turbine Fuel (ATF), he said in India, ATF prices had been traditionally higher because of high taxation both by state and central governments.

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The minister said while ATF prices came down worldwide, the whole benefit was not passed on to airlines.

He noted that while the central government and some states “adjusted” taxes on ATF, it remained highest priced in the world. “At the same we have the highest growth in terms of passenger traffic,” he said.

Raju said it was a fact that petroleum products in India are highly taxed.

Civil Aviation Secretary R. N. Choubey clarified that there is no Value Added Tax (VAT) and excise duty on ATF sold to foreign airlines for travel abroad.

On 5/20 rule, he said while they have come to a reasonable understanding what is the best way forward, the cabinet will take a final decision. He said the policy will be unambiguous on the issue.

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According to the 5/20 rule, all airlines in India are permitted to fly abroad only if it has five years of domestic flying experience and at least 20 aircraft in its fleet.

Choubey said the ministry received very large number of inputs on the issue from those who favour the rule and those who do not accept it. There were also deliberations on this issue, he added.

On Maintenance, Repair and Overhaul (MRO), Raju said the government was also addressing the issue of high taxation to bring back $700 million MRO business to India, which will also generate employment.

He said it was a fact that airlines registered in India are taking their aircraft abroad for MRP though the country has the talent pool and capability.

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He said the ministry during the process of calling suggestions, gathered that taxation in terms of cutoms duty, VAT and service tax is a disadvantage.

Choubey said some measures were already announced in the union budget to remove bottlenecks for MRO business in India.

“All efforts will be made to ensure that $700 and $800 million MRO business remain in country and possible couple of billion dollars from neighouring countries come to us because no one has better technological pool than our own,” he added.

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