On Friday, the central government made it clear that the 11 percent basic excise charge on jet fuel would still not apply to fuel supplied to aircraft travelling internationally.
There was misunderstanding over the matter among airlines and fuel sellers, which led to the explanation, a corrigendum to a notification from the finance minister last week. As of July 1, the government levied an extra excise levy of six rupees per litre on the export of jet fuel.
The accompanying announcement had stated that the basic excise charge would not apply to jet fuel intended for export. The fuel used for overseas flights, which was exempt from the general excise charge, was not mentioned at all.
Because the new notification only identified exports as being free, some gasoline retailers apparently believed that the former duty exemption on jet fuel sales to aircraft travelling abroad had been cancelled. Jet fuel “provided as fuel to foreign going aircraft” is now expressly stated in the notification that it is exempt from basic excise duty by the government. The aviation industry filed a complaint with the authorities claiming that oil companies had been refusing them an excise exemption since July 1.
Domestic airlines are once again on par with foreign airlines for which the fuel is duty-free in accordance with the Chicago convention after the finance ministry confirmed that excise duty won’t be levied to them for overseas flights.