Tuesday, March 3, 2015

No Relief for Business Aviation in India's New Budget

by Neelam Mathews

 - March 1, 2015, 10:59 AM

A uniform rate of import duty on private and charter operators was not included in India’s budget for the financial year (April 1, 2015 to March 31, 2016). The nation's Business Aircraft Operators Association had hoped the budget would introduce equal taxation, which it believes is essential to strengthening the business aviation sector in the country.
Under the current rules, the levy on an aircraft imported for personal use is between 19 and 21 percent, while charter operators pay approximately 3 percent. The differential tax structure often leads private operators to import aircraft as “nonscheduled operators.” This complicates monitoring the aircraft, and the BAOA is working with the Ministry of Civil Aviation on requirements to regulate aircraft for categorization (similar to the procedure for commercial aircraft) to become eligible for similar duties, according to BAOA secretary R.K. Bali. A meeting with the ministry is scheduled for next week.
Regional and remote connectivity cannot take off in India unless larger issues are addressed, according to theBAOA. “Operations remain unviable thanks to severe taxation; aviation infrastructure is pathetic…and 90 percent of Indian aircraft are being maintained overseas because of high duties and costs,” said BAOA president Rohit Kapur.

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