Trade Articles

With an attempt of bailing out the aviation sector for maintaining its part of the bargaining, the United Progressive Alliance (UPA), has waived out the 5 per cent basic custom duty on aviation turbine fuel (ATF). The sinking aviation sector got a life jacket with the aforesaid move of the government. Earlier the government was in the mood of rationalizing the jet fuel duties in case the nation's airlines failed to resort of lay offing for securing their profits. Now the government is all set towards pro actively mitigating the falling off of the global financial crunch on the domestic companies. According to the statement issued by the finance ministry,"Though there are no imports of ATF (aviation turbine fuel) and it is a freely priced petroleum product, the price of domestically produced ATF is based on import parity price factoring in the basic customs duty. The exemption would result in lowering of the base price of ATF and, consequently, lowering the incidence of excise duty and VAT (value-added tax), giving substantial relief to the aviation sector". Moreover it added that "The exemption would result in lowering of the base price of ATF and, consequently, lowering the incidence of excise duty and VAT, giving substantial relief to the aviation sector".However, airline companies are still undecided that whether the benefit of custom duty abolition will be transferred to the customers in the form of lowering the fares or not.

History of the India's Aviation Sector
India's aviation industry is considered as one of the fastest emerging aviation industries in all over world. Thanks to the liberalization policies adopted in the sector, the aviation industry has touched the new heights of success and has witnessed the complete transformation. From being known as the government owned sector, the aviation industry is now being dominated by the privately owned full service airlines and low cost carriers. As per the estimate, the private air lines have accounted to around 75 per cent share of the domestic aviation sector. The originative roots of the aviation industry can be tracked back to the 1912, when the first air flight took off between Karachi and Delhi. It was started by the Indian State Air Services with the collaborative efforts of the UK Based Imperial Airways. In the starting of year 1948, the Indian government, formed the Air India International Ltd., joint sector company with the collaboration of the Air India with Rs.2 crore capital. Its first flight took off on 8th June, 1948 between the Mumbai-London. In the year 1990, April, the government introduced the open sky policy which permitted the air taxi operators to get their flights operated from any airport.

In 1995, many private airlines had make their entry into the aviation sector, which resulted into more than 10% of the domestic air traffic. Like NEPC Airlines, Jet Airways Sahara, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. With the arrival of Jet Airways and Sahara, many Indian airlines, which had earlier shared a major portion in the aviation industry, soon forced to vacate the space fo Jet Airways and Sahara. Now in today's date there are many private airlines, which have dominated the Indian aviation industry. Such as SpiceJet, GoAir, Deccan Airlines etc. The air transportation in the India is come under the straight control of the Department of Civil Aviation. It is the wing of the Ministry of Civil Aviation and Tourism of Government of India.