Mumbai: Air carriers want the sales tax on jet fuel to be slashed to a uniform rate of four per cent across the country and import duty to fall to five per cent in the forthcoming Budget.
The Federation of Indian Airlines, which represents eight of the major airlines in the country, also wanted the fringe benefit tax on several offerings to go and tax exemptions for employing scarce pilots and engineers.
"Excessively priced jet fuel in India is a long-standing and an unresolved issue, which is contributing to the large losses being incurred by the Indian airline industry," it said in a statement.
Jet fuel, which is almost three fourths costlier than international benchmarks, accounts for 40 per cent of the operating cost of an airline.
The fast-growing airline industry lost around half a billion dollars in the year to March 2007, hit by low fares due to competition and high fuel cost.
The quick expansion has also resulted in a shortage of trained crew, and that is why airlines want tax exemption for hiring foreign pilots and technicians.
"The industry has to find pilots in competition with airlines operating in the Middle East and Far East, where there are either no taxes or very little taxes," Siddhant Sharma, executive chairman of budget carrier, SpiceJet, said.
"In such a case, the airlines in India have to absorb the taxes to be able to attract pilots," he added.
The federation estimates the unmet demand for pilots in the aviation industry at more than 4,500. The country's aviation market has expanded by more than a fourth over the last 2-3 years and carriers have ordered 453 planes worth $28 billion.
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