Expressing concern over high costs afflicting the aviation and tourism sectors, travel trade and industry representatives today asked the government to slash sales tax on jet fuel and rationalise the overall tax and duty structure.
The representatives sought other measures to encourage regional connectivity and engineering activities.
The Indian aviation industry has felt the brunt of aggressive price cuts, rising costs, increasing price of jet fuel, depreciating value of rupee and high interest payment, Ankur Bhatia of the CII National Committee on Civil Aviation and Executive Director of the Bird Group, said.
Raising several demands, he said the "unpredictable nature of business and high risk" made the aviation sector a very restrictive industry for a majority of the financial investors to even consider investing in it.
Bhatia hoped the government would consider some of these key issues that "cripple the industry and force them to indulge in unhealthy competition and price wars."
Both Bhatia of CII and another industry chamber, American Chamber of Commerce in India, highlighted the high taxation on jet fuel and said that since fuel cost alone constituted 40-45 per cent of the operating costs of an airline, rationalisation of taxes should be carried out on this item alone.
Regarding the tourism industry, President of Indian Association of Tour Operators (IATO) Subhash Goyal said the industry should be treated on par with exporters, based on its foreign exchange earning.
Making a strong case for withdrawal of service tax on package tours as payments were received in foreign exchange, Goyal said, "no benefits are being given to tourism sector which were available to exporters of goods. This is despite the fact that tourism industry earns foreign exchange much higher than any other export oriented industry.
