Clearing the air on a earlier notification imposing excise responsibility on Aviation Turbine Fuel (ATF), the finance ministry has issued a brand new notification saying that home airways flying abroad will probably be exempted from paying excise responsibility on jet gas. This brings the home airways at parity with worldwide carriers.
However, airways will proceed to pay an 11 per cent excise responsibility on ATF used for flying plane domestically. In a notification dated July 7, the finance ministry stated the exemption from each primary excise responsibility and particular extra excise responsibility could be relevant retrospectively from July 1.
Prior to July 1, home airways didn’t pay excise responsibility on ATF when flying internationally however after the notification that imposed an export responsibility on ATF, petrol and diesel, oil advertising and marketing firms thought of the exemption to be withdrawn. Airlines had subsequently approached the federal government citing oil entrepreneurs denying excise responsibility exemption to them for flying overseas since July 1.
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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 gas is exempt from responsibility as per the Chicago conference.
KPMG tax companion Abhishek Jain stated: “…the potential levy of excise duty on ATF supplies to a foreign going aircraft has proactively been exempted by the government, with no excise duty (basic or special) being applicable on such supplies”.
“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,” he added.
