Lok Sabha Question No. 808 (UNSTARRED), answered on 2015-12-03
Subject: Impact of Reduction in Aviation Fuel Prices on Aviation Sector
Ministry: CIVIL AVIATION
Asked by: JOSE K. MANI, P.R. SUNDARAM

## GOVERNMENT OF INDIA

NO. December 2015)

MINISTRY OF CIVIL AVIATION LOK SABHA UNSTARRED 808 (To be answered on QUESHOe

## IMPACT OF REDUCTION IN AVIA TION FUEL PRICES ON AVIATION SECTOR

808.

SHRI JOSE K MANI SHRI PR SUNDARAM

## Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether there has been a huge decline in the of Aviation Turbine Fuel (ATF) in the international market recently; price
- (c) whether implementation of a reduced and uniform taxation structure on ATF across all States is likely to would fuel costs largely in line with global level and improve financial health and competitiveness of airlines by reducing their operating costs and the reduction in air fare reaching to air passengers; bring
- (b) if so, the price of ATF in the international market during the last three years and the current year; year-wise;
- (d) if so, the details thereof; and
- (e) the steps taken by the Government to impress upon States with high taxes on ATF to reduce their taxes or have a uniform tax on ATF in the country to increase competitiveness of Indian aviation companies?

## ANSWER

## Minister of State in the Ministry of CIVIL AVIATION

(Dr Mahesh Sharma)

- (a) & (b): The prices of Aviation Turbine Fuel (ATF) in the international market during the last three years and the current year is given in Annexure-I

(c) to (e): The cost of ATF constitute about 45% of the operational cost of an airline and Value Added Tax (VAT) on ATF is in the ranges of 0% to 30%. Government has been requesting the State Governments to reduce VAT on ATF to make airline operations commercially viable. Some of the States like Odisha; Jharkhand, Madhya Pradesh, Andaman and Nicobar, Chattisgarh; Andhra Pradesh, Telangana and Punjab have responded positively and reduced Maharahstra, West Bengal and Rajasthan have selectively reduced the VAT o ATF.

The Ministry of Civil Aviation had also taken Up the issue of inclusion of ATF in the category of 'Declared Goods' with the Department of Revenue; Ministry of Finance. This was deliberated upon by the Empowered Committee of State Finance Ministers wherein it was unanimously agreed by the States that ATF should not be notified as Declared Goods' .

ATEprices in international market (S/BBL)

## Notesi

|         |   2012-13 | 2013-14   | 2014-15   | 2015.16   |
|---------|-----------|-----------|-----------|-----------|
| Apr     |    130.59 | 113.32    | 118.30    | 69.51     |
| May     |    120.79 | 112.95    | 117.32    |           |
| Jun     |    107.88 | 114.40    | 118.28    | 71.45     |
| Jul     |    114.72 | 119.14    | 116.37    | 62.23     |
| Ayg     |    126.79 | 122.23    | 113.76    | 53.79     |
| Sep     |    129.96 | 12122     | 109.68    | 56.60     |
| Oct     |    127.51 |           | 98.76     | 57.40     |
| Nov     |    122.19 |           | 93.55     | *55.71    |
| Dec     |    121.59 | 124.19    | 75.73     |           |
| Jan     |    125.44 | 119.51    | 60,98     |           |
| Feb     |    131.3  | 120.40    | 70.81     |           |
| Mar     |    120.4  | 117.47    | 67.18     |           |
| Average |    123.11 | 118.80    | 96.98     | 62.87     |

## Aunexure-]

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