The Finance Ministry has exempted home airways operating worldwide flights from 11 per cent fundamental excise responsibility on ATF or jet gasoline purchased from oil advertising firms.
In a notification, the ministry stated that ATF equipped as gasoline to home carriers on worldwide routes would proceed to be exempted from fundamental excise responsibility from July 1.
Confusion arose on the leviability of the excise responsibility on home airways for his or her overseas flights after the federal government on July 1 slapped a Rs 6 per litre particular extra excise responsibility (SAED) or responsibility on the export of jet gasoline.
Oil firms have been of the view that with the levy of export responsibility, home carriers could be liable to pay 11 per cent fundamental excise responsibility for the Aviation Turbine Fuel (ATF) they buy for operating abroad flights.
The Finance Ministry’s clarification that excise responsibility wouldn’t be relevant on home carriers for overseas flights brings them again at par with overseas airways for which the gasoline is exempt from responsibility as per the Chicago conference.
KPMG Tax Partner Abhishek Jain stated “the potential levy of excise responsibility on ATF provides to a overseas going plane has proactively been exempted by the Government, with no excise responsibility (fundamental or particular) being relevant on such provides.
“This alignment to the taxability as existent pre-imposition of excise duty on exports is a much welcome move for the airline industry, specifically in the backdrop of increasing ATF costs,” Jain added.
Source: www.financialexpress.com”