A more enlightened and effective taxation policy can enable the Indian industry soar to greater heights
WITH A MARKET SIZE of around $16 billion, the Indian aviation industry, which is the ninth largest civil aviation market in the world, is forecast to be the third largest by 2020. There is much discussion and debate in the industry regarding the steps that the government can and must take to realise this potential and ensure robust growth. More often than not, infrastructure development and a clear and defined policy are cited as key levers to provide the desired impetus to the civil aviation industry. However, in order to develop infrastructure and fund other public development work, it is crucial for any government to levy tax in various forms. But it is equally important to take into account the impact of the tax structure could have on the industry.
The tax structure formulated by the government not only directly affects the bottom line of any company, but also can make the domestic industry segment attractive or unattractive when compared to international economies. This article highlights some of the key tax issues with respect to the Indian civil aviation industry that can enable it to soar to even greater levels.