Govt. moots VAT reduction on turbine fuel

With a view to achieve better connectivity to remote areas and different regions of the country, the Government has laid down certain route dispersal guidelines. The government is persuading the state governments to reduce VAT on aviation turbine fuel (ATF), allowing direct import of ATF by Indian carriers as actual users. The participation of foreign airlines up to 49 percent in the equity of scheduled air transport undertaking is also being permitted. This will allow external commercial borrowings (ECB) for working capital requirement of airline industry for a period of one year subject to a total ceiling of US $1 billion. Furthermore, tax concessions for parts of aircraft and testing equipment for third party maintenance, repair and overhaul of civil aircraft are also a part of the measures.