Ajay Singh, chairman and MD of SpiceJet accuses govt on higher tax. The country’s leading private aviation company has said that India has emerged as a fast-growing large market in the field of civil aviation. This is the right time when the government should make other reforms in this sector including reducing tax rates. He said that the tax rates in the civil aviation sector in India are very high, making it not competitive in the global market.
The aviation sector should be seen as a job-creating sector from Govt.
Singh said that the aviation sector should be seen as linked to the creation of jobs as a whole. By reducing tax, this sector will be able to compete in the global competition. Singh is also a member of the delegation led by Finance Minister Nirmala Sitharaman, who went to the US to attend the World Bank and IMF meeting. He said that the aviation sector has been demanding exemption from the Government of India for a long time. We want our cost to be at par with other airlines on a global scale.
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India is the only country in the world, where aviation fuel is taxed at 35%. No other major country does this in the field of aviation. In this way, India gets out of the global competition.
18% GST for maintenance and repair in the aviation sector is very high
Referring to another major problem of the aviation sector, Singh said that the sector has to pay 18% GST for maintenance and repair, while this is an area for which there is a lot of potential in India. He said that work related to the repair of aircraft can be done in India only. We have the infrastructure and skilled people for this. Despite this, most of the repair work of Indian aircraft is done abroad. The main reason is the high tax rate here, due to which the repair becomes expensive.
He said that it needs to be understood properly if tax is high then no one will want to work. When there is no work, there will be no tax and then no revenue will be generated. Therefore, there is a need to reduce tax here. In this way, India can become a global base for repair.
India needed to build international hubs like Dubai, Abu Dhabi, Doha and Singapore
Singh also spoke of the need to build airport hubs in India. He said that India needed to build international hubs like Dubai, Abu Dhabi, Doha and Singapore, so that travellers going to Europe, America and the Far East could fly direct from cities like Delhi, Mumbai, Hyderabad. It is worth noting that SpiceJet has talked about expanding its operations to several international destinations in the recent past.
