Thursday, June 8 2006 14:48 Hrs (IST) - World Time -

New Delhi: The draft Civil Aviation Policy is ready and could be taken up by the Union Cabinet for approval this month itself, Civil Aviation Minister Praful Patel said today (June 8, 2006).

Comments on the policy from all Ministries concerned and agencies have already been received, he told reporters here.

A bill to establish an Airport Economic Regulatory Authority was also ready. It could be taken up by the Cabinet this month and was likely to be tabled in Parliament in the coming Monsoon session, he said.

Replying to questions on the government decision to impose 12.5 per cent service tax on First and Business Class international air travel, Patel said he would take the issue up with the Finance Ministry.

Referring to opposition to the tax at the recent general meeting of the International Air Transport Association (IATA) in Paris, he said the airlines and IATA representatives pointed out that it was not in keeping with international practices and was not a practical move and added that he would take up these concerns with the Finance Ministry.

The taxation provisions were now being interpreted in such a manner as to impose the tax, not only on the two higher classes of travel, but also on any fare which was more than the lowest economy fare slab. Also, any passenger traveling to a third country with a stopover at an Indian city would be liable to pay the tax, industry sources said. When asked about these concerns expressed by the industry, Patel said he would raise these issues also with the Finance Ministry.