India’s aviation sector expects the finance minister to announce a series of measures, including tax sops, in the upcoming budget to help the industry tide over the crisis as the covid pandemic has accentuated its financial woes.
The government must consider bringing aviation turbine fuel under the goods and services tax (GST) regime, besides reducing airport charges, overflight fees, and excise duty on fuel, as well as extending lower rate for withholding taxes, to help the aviation sector bounce back, experts told Mint.
“This budget should focus on extension of lower rate on withholding taxes, which was decreased to 25% of the standard rate. This should be extended for another year till the market has fully recovered as it will help increase liquidity.
Another area of focus should be the lowering of the income tax rate for travel companies,” Kanika Tekriwal, chief executive and founder of JetSetGo Aviation, a New Delhi-based private jet operator, said.
“GST on the travel industry should be restricted to 5%, be it travel by private charter or commercial flights, to decrease the costs of travelling for people who don’t get GST benefits. It will be a boost for the economy,” she said.