Charter operators to pay Rs 1,000 cr as taxes

Charter operators might have to cough up Rs 1,000-Rs 1,200 crore (Rs 10-12 billion) as taxes and penalty for aircraft that they have imported under the Non-Scheduled Operators Permit (NSOP) even though they are being put on personal use.

However, this is based on the assumption that all the 50-odd aircraft and helicopters, which have been bought after April 2007 - when the differential import duty regime for charters and aircraft for personal use was imposed by the government - have violated the regulations. But the numbers would be much less as many would have been bought by regular private charter operators, flying schools and even the state government.

A private aircraft can cost Rs 20 crore (Rs 200 million) to Rs 160 crore (Rs 1.6 billion) and about 80 per cent of the private aircraft are second hand, which are much cheaper than the market price. And some of them would have also imported helicopters which are much cheaper. So the average list price of an aircraft is Rs 85 crore-Rs 90 crore (Rs 850 million - Rs 900 million).

The import duty violation came to light when the Customs department recently alleged the Ambanis of a tax evasion of Rs 57 crore (Rs 570 million) for two business aircraft, which had been brought under a private charter operator's licence but were being used for personal travel.

Companies importing private aircraft have to pay a Customs duty of 3 per cent, a countervailing duty of 16 per cent and an additional duty of 4 per cent totalling 23 per cent. However, they are exempted from all these taxes if they are importing the aircraft for scheduled or non-scheduled (charter) operations.

According to sources, 30-40 charter companies have been sent notices and have been asked to show the details of their charter operations, failing which they would have to pay the taxes totalling  23 per cent.

Sources also said that there might be an additional penalty of around 5 per cent adding to a payment of around 28 per cent of the total aircraft price. India currently has more than 50 charter operators.

According to Directorate General of Civil Aviation figures, there are around 250 private aircraft flying in the country right now, which include aeroplanes and helicopters owned by state governments, public sector helicopter operator Pawan Hans, and some owned by flying schools.

Since the imposition of the taxes was announced last year, only those aircraft which were imported from April 2007 to June 2008 would be under the scanner. Industry estimates pegged the total number of such aircraft at around 50.