New Taxes for Indian Aviation

[jimmygill]

5% Excise on crude

This should eventually result in some increase in ATF price, this additional tax will be of same order as the USD 240M bailout to NACIL. Subsidizing incompetency.

10% Service Tax

Both on domestic and overseas travel. How on earth will Indian Carriers compete with Eastern and Mid-Eastern carriers.

I feel government is following the policy of "If it moves, tax it."


Apparently they put service tax on Indian Railways too.

[optimus.Prime]

I feel government is following the policy of "If it moves, tax it."

I second that!...That Day aint far when even the bullockcart(s) on the road might be taxed...the Cart itself for it's stupendously slow speed and the Bullock for ...well the Methane(ahem//ahem)...a La New Zealand.

Seems like right when the Aviation Sector was speaking about Stabilising after a horrendous couple of years, they've hit a brick wall in the form of our dear Mr.FM(PM)!

Talk about the wrong stuff..........

[soaring.high]

Excuse given for implying service tax on aviation industry and raising fuel prices
"We have increased the tax slab for common man, they will have more money in their pockets to spend!!!"

1. The common man is already under a financial burden (E.g.Sugar prices,Dal pricces,Fuel prices sky rocketing etc etc).It is already a case of "Aamdani athanni kharcha rupaiya" for him.
2. Would he buy fuel surcharge,airport charges and now service tax added extra expensive air ticket because he is saving tax ? !!!Does not sound too practical to me. I would not do that certainly...I would rather get my house painted (which is crying out loud that it needs to be painted!!) from those saved money.

I remember the ad campain run by the congress before the elections.The slogan was " Congress ka hath...Aam aadmi ke sath!!".I wonder what ever hapenned to it!! I think now they should change the slogan to " Congress ka hath...Aam aadmi ke GAAL(cheek)"!!

[shanx]

What we all are experiencing now is collective and accumulated irresponsibility and apathy of the citizens of this country.

Such budgets and policies in general are expected of a government which has been elected for a SECOND TERM by barely 20% of the people (considering average voter turnout and division of votes for ruling party vs opposition). .. and we still keep singing that we are the second largest democracy !

The best thing for a country like India is to have different Parties (or Dynasties ) governing the country every 5 years.

As long as people continue to live blissfully in their COCOONS, without giving two hoots to what's happenning around them, such things will continue and only increase as time passes.

[jimmygill]

Coming to the gems of Indian taxation rules, I had always wondered how come flying training institutes don't have to pay service tax in India while a private tutor teaching for 10+2 exam strictly speaking is liable to service tax.

Here is an excerpt of a ruling from Authority for Advanced Ruling on Custom, Excise and Service Tax related CAE (a TRTO in India) appeal on exemption of service tax. (Feb 4, 2010)

Coming to the decision of the Customs, Excise and Service Tax Appellate Tribunal in the case of M/s Pasha Educational Training Institute (para 20),the Learned Tribunal has not specifically discussed the aspect as to how the training in the appellant-institute would directly enable the trainee to seek employment or undertake self employment. Except referring to the fact that the appellant institute is recognized by IRDA no other reason is given to say that the appellant institute satisfies the ingredients of a vocational training institute. Moreover, there is a possibility of candidate undergoing training in the said institute seeking self employment in some form or the other in the insurance sector. In the case before us the factual position as far as aircraft pilots are concerned is very much different .A Commercial Pilot ’s Licence holder cannot seek the job of flying an aircraft for which he has undergone Type Rating Training unless an endorsement to that effect is made in the licence of the CPL holder by the DGCA. It is the endorsement which makes him eligible to obtain employment with Airlines to fly the aircraft for which he has been type rated and not the fact of having completed the training with the institute. Surely the medical assessment required to be appended with the application form cannot be given by training institute. The DGCA clearly requires more than the course completion certificate for endorsing the Aircraft Type Rating in the licence of CPL holder. It is incorrect to claim on behalf of CFTI that a trainee pilot can directly obtain employment after completion of the course. The activity which enables the CPL holder to get the employment is the endorsement on the licence by the DGCA. If a similarity has to be drawn a motor vehicle driver cannot legally obtain employment as a driver merely after undergoing training in a driving school unless he has obtained a driving licence from the State Transport Authority. M/s Pasha Educational Training Institute ’s judgment has to be analysed in this background.

I agree whole heartedly to the Authority, its the stamp on your DGCA license which gets you the job and not the training.


PS: My personal view on service tax is, all things sold which are not products must be services and hence must be taxed, no exemptions whatsoever.

[soaring.high]

@Shanx

The best thing for a country like India is to have different Parties (or Dynasties ) governing the country every 5 years

Wont work mate,those parties will try to make as much in those 5 years while they are in power as what they were planning to make in a longer time span and we will be at the receiving ends!!