New Delhi, March 27 (IANS) A leading industry chamber has asked the government to remove the countervailing duties on aeroplanes, helicopters and spares when they are imported by non-scheduled operators.
In a memorandum to the finance ministry, the Confederation of Indian Industry (CII) referred to the budget proposal of imposing a 3-percent basic duty, 16-percent countervailing duty and 4 percent additional levy on import of aircraft and helicopters, against nil duties earlier.
The finance ministry had maintained that the 16 percent countervailing duty and the additional 4 percent levy could be adjusted against excise and service taxes and hence the additional tax burden would be just 3 percent.
"But affected operators of aeroplanes and helicopters cannot avail central value added tax credit for the countervailing duty and the additional levy as non-scheduled operators do not have a levy to set it off against," the CII said in a statement.
Also, aircraft are not included in the definition of permissible capital goods as per the rules set for value added tax and this proposal would put the incidence of total duty at around 25 percent, it added.
Non-scheduled operators generally acquire aeroplanes and helicopters to rent them out on chartered routes for tourism and other purposes, providing an alternative mode for fast movement.
Propeller-driven aircraft are also used for movement of drilling experts and managerial staff to remote locations of oil and gas industry, while helicopters are deployed for offshore support for oil operations, medical emergencies and natural disasters, CII said.
"The sudden imposition of such a heavy duty would make such companies unviable as the total cost of operations are made without considering the duty as per earlier provisions."