India aviation outlook: Union General Budget 2010/11

India’s financial year 2009/10 is drawing to a close - and not a minute too soon for many of the country’s beleaguered airlines. In the shadows of a new year, which brings some hope of an improving earnings environment for the sector, the Indian Ministry of Finance (MoF) has announced the Union General Budget 2010/11, and there is a sting in the tail. Highlights for the Indian civil aviation sector include budgetary support for the Ministry of Civil Aviation (MoCA), Air India and the Airports Authority of India (AAI). However, this budget is not just a financial provision for the sector in the coming year. There are now two additional imposts on the aviation sector – most significantly, the budget has extended the application of 10% service tax to all air travel and applies a 5% excise duty on aviation turbine fuel.

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