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Civil Aviation Minister Ajit Singh and Petroleum Minister M Veerappa Moily today agreed on the need to declare jet fuel air turbine fuel (ATF) a "notified good", to bring down its cost for cash-strapped airlines. Singh and Moily will make a representation to Finance Minister P Chidambaram to demand a declared goods status to ATF.
Under this classification, ATF will attract central sales tax of three per cent, instead of varying rates of local sales tax or VAT, which are as high as 30 per cent in Gujarat and 24 per cent in Maharashtra. At the meeting, Singh demanded oil companies end discrimination against government-owned Air India. The minister also made a case for use of oil companies' infrastructure by airlines for fuel import.
Singh pointed out oil companies were offering discounts in ATF sales to other airlines and demanded similar concessions for Air India.
Singh said the meeting was "positive'' and Moily had in principle agreed to airlines' demand to allow them to use infrastructure for import of ATF. However, others present at the meeting said petroleum ministry officials and executives from oil companies were opposed to many demands. "The pricing of ATF is not transparent and should be brought under the Petroleum and Natural Gas Regulatory Board,'' Singh stated.