Government will discuss inclusion of aviation turbine fuel (ATF) under goods and services tax (GST) regime in the next meeting of the council, finance minister Nirmala Sitharaman said on Sunday, while saying that rising global fuel prices is a "concern".
Interacting with industry body Assocham, the finance minister said that the GST council in its next meeting will take up the matter of ATF's inclusion in the regime.
"It is not with ... (the Centre) alone, it has got to go to the GST Council. The next time we meet in the Council, I will put it on the table for them to discuss it," she said.
When the GST was introduced on July 1, 2017, amalgamating over a dozen central and state levies, five commodities – crude oil, natural gas, petrol, diesel and ATF – were kept out of its purview given the revenue dependence of the central and state governments on this sector.
The minister was responding to views expressed by SpiceJet Founder Ajay Singh where he sought the support of the finance minister in bringing ATF into the GST regime.
"Oil is at $90, the rupee is at 75 to a dollar and, therefore, the civil aviation sector has become chronically ill. Your kind support (in bringing ATF into GST) in this process will be extremely helpful," Mr Singh said.
Currently, the central government levies excise duty on ATF while state governments charge VAT. These taxes, with excise duty, in particular, have been raised periodically with rising oil prices.
Including oil products in GST will not just help companies set off tax that they paid on input but will also bring about uniformity in taxation on the fuels in the country.
"Of course just not for the airline but the global price of fuel is now a concern for all of us, more so for airlines which have not seen a complete head-up post the pandemic," Ms Sitharaman said.
She said she will speak with the banks to see what best we can be done for the airline sector. "You also spoke about the industry status to be given so that can help to attain better banking assistance. I will have a word with banks on that."
Mr Singh in his remark had said banks instead of being supportive to stressed sectors are withdrawing facilities from these sectors.
"So, I request that there should be a message of support from the government.
"If for a period of two or three years these sectors could be put under priority lending or infra category that would help because today the banks are not there when we need them, they are in sectors which are doing well and that's creating a great deal of stress," Mr Singh added.
Ms Sitharaman responded by saying that "there are serious problems... I understand. Just as we were thinking that the airline industry is going to revive we had Omicron come in and more than anything else states being very, very cautious have brought in again severe restrictions in movement of people and...internationally too the quarantine requirements are really hurting the airline industry just at a time when you are likely seeing a revival".