The finance ministry on Friday clarified that domestic carriers’ aviation turbine fuel (ATF) purchases for international flights will remain exempted from 11% basic excise duty, ending confusion over the duty after the Centre imposed Rs 6/litre special additional excise duty on export of the fuel from July 1.
In a notification, the ministry said that ATF supplied as fuel to domestic carriers on international routes would continue to be exempted from basic excise duty from July 1. “When such goods are cleared for exports or supplied as fuel to foreign going aircraft,” the duty will not apply ,the ministry said in a corrigendum to its earlier order issued on June 30 that read “when such goods are cleared for exports.”
Till the export levy was imposed on July 1, there was no issue as ATF used by domestic airlines’ overseas flights were exempt from the basic excise duty along with foreign airlines refueling in India as they were deemed exports.
Even though the export tax was not applicable on ATF used by domestic airlines, one of the OMCs started levying 11% basic excise duty on fuel purchased for international flights. Domestic airlines immediately sought rollback of the duty as it was making their international operations costlier and disadvantageous against foreign airlines that are exempt from the duty.
Image and article originally from www.financialexpress.com. Read the original article here.