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Gujarat cuts tax on aviation fuel: should other states do the same?

Created by : Mridula Maity, Product Development Manager, Rugel  | 05 05 2011 05:52:23 +0000
Industry : Transportation/AviationFunctional Area : Strategy Execution(Strategy & Execution)
Keywords : gujarat domestic flights travel business aviation fuel aviation tax
Activity:  289 views;  last activity : 12 01 2011 06:18:17 +0000

Gujarat government has sharply reduced tax on aeroplane fuel for flights operating within the state to encourage intra-state aviation. Value-added tax on Aviation Turbine Fuel was cut from 30% to 4% for all non-scheduled flights days after the state roped in Capt Gopinath-led Deccan Charters to start intra-state aviation service.

Corporates operating own flights in the state can now save up to 20% on fuel costs. Fuel cost constitutes around 40% of the total operating cost of an airline. Business groups like Adani, Reliance, Essar, United Phosphorous, Sterling, Electrotherm among others regularly use own planes in the state.

Aviation experts say the decision will boost business travel and tourism within the state. Gujarat is among the top three states that attract highest domestic investments.

So do you think other states should follow the lead of Gujarat?

  
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Top Argument
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Its a good step to encourage Airlines to start intercity services. This will also reduce the road traffic and reduce the burden on Trains.
By Rajesh Thakkar, Key Account Manager,  05 05 2011 08:37:56 +0000
 
Top Argument
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This is not a correct step. Mr. Modi is just bending over backwards to cater to big money industrialists.

Our first priority should be to establish a good road infrastructure to the remotest villages , so that the benefits of progress such as education , medical care  can flow to the villages , and agricultural produce can be easily marketed.

The next priority should be to widen the train network , since goods movement by train is the cheapest.

Air travel is for the rich , and by enabling corporates to benefit , the rich are becoming richer. Why can't corporates embrace video calling and video conferencing , which will save the country hundreds of crores by way of foreign exchange currently being spent on importing petroleum products ?

 
By K. NARAYAN, None, None  05 05 2011 15:15:34 +0000
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This would give a chance to survive for some airlines as well it would open up new ventures in means of Aviation and tourism within the effective regions of tax cut.
By Hemanth Kumar Muppala, M.T Store Supervisor[Logistics], KBR UK Ltd  | 12 01 2011 04:27:24 +0000
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for heaven sake govt of Maharastra is charging close to 40% as tax plus octroi !!
By Sarabjeet Singh Johar, BMS student, Mumbai University  | 05 07 2011 17:04:21 +0000
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At least One CM is thinking for the prosperity of his State always in our Nation.Let Him have a longlife.
By pandianarjunan , project manager  | 05 05 2011 14:12:59 +0000
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It's a great news for the customers & really a good initiative taken by Gujrat govt.

I support your views, Mridula & thanks for referral.
By SHRIKANT MANOHAR DANKE, Project Manager, Phadnis Infrastructur Ltd  | 05 05 2011 09:57:16 +0000
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yes, this will lessen the burden on airline...
By Pankaj Mulchandani, Marketing Manager, Falcon MSL  | 05 05 2011 07:37:00 +0000
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The more and more our UPA hates "Modi", he is emerging stronger, by wooing industrialists and extending sops in various ways in Gujarat! Its a good move, but we have to wait and watch whether he would be able to sustain his initiative, as the centre is planning to hike petrol and diesel price after 15th May!
By S. Muralidharan, Executive Director, Knowledge Foundation & Campus Around the Corner  | 05 05 2011 06:00:50 +0000
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This would be beneficial to the state as a whole and if it happens in all the states then definitely it will be beneficial to the nation.
By Mridula Maity, Product Development Manager, Rugel  | 05 05 2011 05:52:23 +0000
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Each state has it own complexities. You cannot simply ape one other.
By Vinoy Scaria James, Consultant, Travel Hub  | 12 01 2011 06:18:16 +0000
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It depends on the state.If a state is landlocked(crude need to be transported from a state that has a sea port) and do not have enough refineries then the aviation fuel they get/produce will be costlier....they will not be in a position to cut taxes.
By John Jacob, Consultant, confidential  | 05 07 2011 14:15:20 +0000
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This is beneficial to state from commercial point of view. I salute to Mr. Modi for his continuous approach to make gujraj as no. 1 state in development. I don't think we should encourage aviation sector so much that it becomes the first choice for tour & travel. 1st reason is pollution. 2nd reason is consumption of fuel. In place of aviation sector we should encourage railways by introducing super fast train & its network. It will also help to generate employment in India.
By Mani Kant Mishra, SBU/Profit Center Head, FOR CLOSEED GROUP  | 05 05 2011 10:17:12 +0000
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This is beneficial to state from commercial point of view. I salute to Mr. Modi for his continuous approach to make gujraj as no. 1 state in development. I dont think we should encourage aviation sector so much that it becomes the first choice for tour & travel. 1st reason is pollution. 2nd reason is consumption of fuel. In place of aviation sector we should encourage railways by introducing super fast train & its network. It will also help to generate employment in India.
By Mani Kant Mishra, SBU/Profit Center Head, FOR CLOSEED GROUP  | 05 05 2011 10:15:21 +0000
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