Lending an ear to cash-strapped airlines,the Delhi government might consider reducing sales tax on aviation turbine fuel,chief minister Sheila Dikshit said today. I am not promising you anything. But let me see how we can help you. I have been informed that the tax has been reduced in Mumbai,Hyderabad and some other places. I will try to do that but let me see how we can do it, Dikshit said. While she said that such steps were required to be taken as Delhi had become a hub for international passengers,the government has to see that its revenue generation potential is not affected by the tax cut. The Delhi government had last year asked airlines to give a detailed note on how much fuel intake would rise if the taxes were reduced. The current sales tax on ATF is 20 per cent in Delhi,which accounts for almost 25 per cent of the total passenger traffic in India. Airlines do almost 20 per cent of the total fuel tankering from the national capital,which could rise to 25 per cent or more if the tax rates are slashed,experts said. The Andhra Pradesh government has mandated a uniform sales tax of 4 per cent across the state,while Maharashtra levies 4 per cent sales tax for airports other than Mumbai and Pune. The Union civil aviation ministry has been pushing for lowering of sales tax across the country,urging states to form a consensus. However,it has been an uphill task with many states unwilling to let go of substantial revenue through sales tax collection. In fact,the issue is likely to come up in a meeting of the civil aviation ministry with the cabinet secretary in February.
