Budget disappoints aviation, hospitality industry experts
Posted on: 07:12 PM IST Feb 28, 2013
New Delhi: Aviation and hospitality industry experts on Thursday expressed disappointment at the 2013-14 General Budget, saying contentious issues like high sales tax on jet fuel and taxation on travel trade had not been addressed. While welcoming the concessions granted to the MRO (Maintenance, Repair and Overhaul) sector, they, however, termed the decision as a "minor correction" for a "small sector right now".
Ankur Bhatia of CII's National Committee on Civil Aviation and Executive Director of the Bird Group, said the MRO industry was "small right now taking the aircraft population into account. Also, contentious issues likesales tax on aviation turbine fuel has not been addressed". Efforts to promote regional connectivity by developing airports in Tier-II and III cities should have been made, he said, adding that crucial sectors like aviation and hospitality have not been addressed, he said. However, Bhatia hoped that some decisions could be taken later like the one to liberalise FDI in aviation which was not taken in the budget.
"We expected the budget to bring some relief to our mounting woes by reducing service tax...But successive governments have only ensured that tourism sector is not given any relief. It is unfortunate that the government is systematically killing the goose that lays the golden egg," said Subhash Goyal, president of Indian Association of Tour Operators. Amber Dubey, Head-Aviation at KPMG in India, said "It has been a disappointing budget for aviation. There were expectations of relief in ATF and MRO taxes and funding support for regional airports.
"All dashed, except for a minor correction in the duty-free period for import of spares and test equipment for MRO. Aviation sector would continue to struggle till fundamental policy changes on the taxation front are brought in." Peeyush Naidu, director of Deloitte Touche Tohmatsu India, said the budget has proposed to provide certain concessions to the MRO industry "which is a welcome step".
Certain measures proposed to mobilise funds for infrastructure sector in general "could also facilitate investments in the airport sector", where a whopping Rs 60,000 crore worth of investments are required over the 12th Plan period.