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Levying 5% import duty on ATF unlikely to push airfares higher: Finance Ministry

28 Sep 2018 Evaluate

Finance Ministry has said that the government’s move to levy 5 percent import duty on aviation turbine fuel (ATF) is unlikely to push airfares higher as bulk of the fuel is produced by domestic refineries. It said “When we did the exercise of looking at how many items are essential and how many are non-essential, we also looked at whether their capacity in India is available for that item.”

The Ministry has stated that this is the result of the scrutiny of all the items that it has done and also has to look at every small measure to conserve the balance of payments. With regard to ATF, it said that India is not short of jet fuel and the total usage of the fuel was worth Rs 30,000 crore last year. It also pointed out that the import last year was worth Rs 1,100 crore and a 5 per cent duty on that would be a miniscule Rs 55 crore. So, the imposition of duty may not impact airline fares.

The government has hiked customs duties on as many as 19 items, including jet fuel, ACs and refrigerators as it aims to curb imports of non-essential goods. The other items include washing machines, speakers, radial car tyres, jewellery items, kitchen and tableware, certain plastic goods, and suitcases.

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