Skip to main content

GST on Jet Fuel: Airlines Can Earn Rs 5,220cr Input Tax Credit

By
GST on Jet Fuel: Airlines Can Earn Rs 5,220cr Input Tax Credit
Govt too will earn 7% more tax revenue at Rs 10,353 crore
Airlines can annually earn combined input tax credits of Rs 5,220 crore – more than five times of what they are getting now – if jet fuel is bought under the ambit of goods and services tax (GST).Also, contrary to fears that the government will lose out on tax revenue, it will actually earn Rs 10,353 crore, 7% more than what it gets now if the fuel becomes a GST item.
These assessments were given to the ministry of civil aviation last week in a presentation by top executives at Indian carriers. The meeting was chaired by minister of state for civil aviation Jayant Sinha.An input tax credit is claimed when a company pays a combined tax on output (air tickets in airlines’ case), reducing the tax paid on input (jet fuel). Airlines currently pay value-added tax (VAT) or state sales tax (4%-30%) and excise duty (14%) on ATF, and get credit only on VAT. The credit amounts to Rs 960 crore. Under GST, there will be a single tax on which airlines can claim credit. The credit would then amount to Rs 5,220 crore.
All petroleum products are currently outside the ambit of GST. In the wake of rising prices following the increase in global crude oil rates, petroleum minister Dharmendra Pradhan recently appealed to the GST council, the nodal body for the tax, to bring petrol and diesel under the GST regime to ensure there is uniform taxation on it. But there has been no talk of bringing ATF under the tax. The central and state governments currently earn Rs 9,713 crore as tax revenue from ATF. Under the GST regime that can increase to Rs 10,353 crore, the airlines said.Airlines also asked for a breather on GST charged on the re-importation of aircraft parts after repair overseas. India doesn't have adequate facilities for repair of aircraft and aircraft parts and hence they have to be sent abroad.
The Economic Times, New Delhi, 21st May 2018

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more