Mumbai: Minister of State for Civil Aviation Jayant Sinha on Tuesday claimed that the aviation sector was completely prepared for the introduction of the Goods and Services Tax (GST) on July 1, and that there was no question of it being deferred as requested by the industry.
“The aviation sector is fully prepared for the rollout of GST on July 1. Many issues were clarified in the previous meeting and we will be having another meeting this week,” Mr. Sinha said.
The Minister’s statement comes days after The Hindu had reported that the Civil Aviation Ministry had written to the Finance Ministry that the GST implementation be deferred by two months as airlines needed more time to revamp their systems to comply with the new tax system.
Mr. Sinha said, “We are having another meeting soon where we will providing further details and making sure all systems are good for the rollout. The national no-fly list rules are also currently being drafted; we will be issuing it in the first week of July.”
The Minister, who was in Mumbai to attend the Indian Merchant’s Chambers Airport Investment Summit, said they were going through the comprehensive and extensive feedback the ministry had received from stakeholders.
The Aviation Ministry’s request for a deferral last week came after Air India, among other carriers, expressed concern over certain aspects of GST.
Airline officials had said it would take time to make changes in the global ticket distribution system to ensure compliance with the tax. Lack of clarity on certain business-related aspects has also raised concerns of higher operational cost for airlines.
Mr. Sinha said Udan or Ude Desh ka Aam Nagrik, the regional connectivity plan, and Digi Yatra could be potential game changers.
Touching upon the issues of providing a unified security and seamless travel experience, the Minister said passenger traffic in India is anticipated to triple, and hence 150-200 operational airports is the need of the hour. “There have been various estimates on the investments required to build all these new airports. But over the next 10-15 years, ₹2-3 lakh crore is going to be required to build these airports and add airport capacity,” he said.
Mr. Sinha said the expenditure would be for building runways, terminals and so on, and that it does not include the cost of land, and the necessary regional connectivity required to build a large-scale airport.
“The investments would be driven largely on a Public-Private Partnership model. It is important for us to ensure that our tariff structures and regulations are world class and attractive for investors, as well as keeping in mind the affordability for passengers,” he said.