NEW DELHI: The government on Friday exempted Indian carriers from paying basic excise duty and special additional excise duty (SAED) on jet fuel purchased for overseas flights.
The department of revenue amended the relevant notifications to create a level field for overseas operations of domestic airlines, which had been put to disadvantage after imposition of SAED.
The government had last month slapped SAED of Rs 6 per litre on jet fuel exports to discourage private refiners from selling abroad without first meeting domestic obligations.
As TOI first reported first on July 3, oil companies took the view that the notification on SAED upended the exemption from 11% basic excise duty (BED) on jet fuel purchased by domestic carriers for their overseas flights as the part of the fuel is consumed before entering international airspace.
This led to Indian carriers being burdened with SAED and BED, jacking up the cost of their overseas operations. In contrast, foreign airlines remained exempted from both taxes under the Foreign Aircraft (Exemption from Taxes and Duties on Fuel and Lubricants) Act, 2002.
The twin taxes proved to be a double whammy for overseas operations of domestic flights.
