Government think tank Niti Aayog today pitched for extending input tax credit on aviation infrastructure under the GST regime.
In its 'Three-Year Action Agenda', Niti Aayog has sought allowing credit for aviation infrastructure under the GST.
"The GST does not provide a tax credit for input taxes on aviation infrastructure. This credit could help reduce airport costs and encourage infrastructure development," it said, adding that the government has already made a similar proposal for cell phone towers and pipelines.
Besides, the think tank has called for including provisions for domestic hub development while auctioning air traffic rights.
The current proposal to offer open skies to countries beyond 5,000 kilometre and auction traffic rights to countries within a 5,000 km radius would increase connectivity, it added.
"However, it may also lead to foreign carriers using their own hubs rather than the Indian hubs. In the past, countries such as Singapore, Turkey and the UK have negotiated traffic rights to balance the development of their local hub airports," Niti Aayog said.
According to the agenda, India should build in provisions around the use of Indian hubs while auctioning traffic rights.
"The bidding for slots through the hub airports could also be linked with the bidding for non-hub or non-major routes. This will help cross-subsidise the less frequented routes," it added.
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