Civil Aviation Minister releases Revised Draft National Civil Aviation Policy (NCAP 2015)

Civil Aviation Minister releases Revised Draft National Civil Aviation Policy (NCAP 2015)

Minister of Civil aviation Shri P. Ashok Gajapathi Raju released the Revised Draft National Civil Aviation Policy (NCAP 2015) in New Delhi today. Speaking on the occasion Shri Raju urged all stakeholders to participate in the process of firming up the policy by giving their valuable suggestions to the Ministry. He said that the Civil Aviation Policy should be a dynamic one which can keep pace with the ever changing demands of the sector.

Minister of State for Civil Aviation and MoS (I/C) Tourism and Culture Dr Mahesh Sharma was also present at the function. Dr. Sharma underscored the importance of bringing air travel within reach of the common man and facilitating regional air connectivity within the country.

Secretary Civil Aviation Shri Rajiv Nayan Choubey gave a presentation highlighting the salient features of the draft policy, which are as follows :

Tatas Vistara airlineAim of the Policy

Ø To provide a conducive environment and a level playing field to various aviation sub-sectors, i.e Airlines, Airports, Cargo, Maintenance Repairs and Overhaul services, General Aviation, Aerospace manufacturing, Skill Development, etc

Ø To create an eco-system to enable 30 crore domestic ticketing by 2022 and 50 crore by 2027. Similarly, international ticketing to increase to 20 crore by 2027.

Draft Policy covers:-

1. Regional Connectivity Scheme (RCS)

Ø Scheme will come into effect from 1 April 2016

Ø Airfare about Rs 2500 for a one-hour flight in RCS

Ø This will be implemented by way of:

ü Revival of un-served or under-served airstrips.

§ Only 75 out of 476 airstrips/airports have scheduled operations. Revival of these depending on demand.

§ Build ‘no-frills’ airports at a cost of Rs 50 crores.

ü Viability Gap Funding (VGF) for scheduled commuter airlines.

§ VGF indexed to ATF prices and inflation.

§ VGF to be shared between Centre and State at 80:20.

§ Creation of Regional Connectivity Fund (RCF) for VGF.

§ Levy of 2% on all domestic and international tickets on all routes, other than CAT IIA and RCS.

ü Concessions by different stakeholders:

· State Government-

o Provide free land and multimodal hinterland connectivity.

o Concessional rates of power, water and other utilities.

o VAT on ATF 1% or less in RCS airports.

· Central Govt-

o Service Tax on tickets under RCS will be exempted.

o ATF drawn by SCA’s from RCS airports exempt from excise duty.

o SCA’s to be treated at par with SOPs for customs duty.

ü Cost-effective security solutions by BCAS and state government.

2. Scheduled Commuter Airlines (SCA)

Ø Eligibility criteria in terms of paid-up capital to be kept at Rs 2 crore.

Ø Aircraft with capacity of 100 seats or less.

Ø No restrictions on number of aircrafts.

Ø Minimum movements per week to RCS destinations as prescribed.

Ø SCA can enter into code share with other airlines

Ø Will be allowed self- handling.

Ø No airport charges on SCA for their operations under RCS. Rationalise in other non- RCS airports

3. Maintenance, Repair and Overhaul (MRO)

Ø Develop India as an MRO hub in Asia.

Ø Service Tax on output services of MRO will be zero-rated.

Ø Aircraft maintenance tools and tool-kits will be exempt from Customs Duty.

Ø Tax- free storage period of spare parts imported by MRO’s extended for 3 years.

Ø To allow import of unserviceable parts by MROs by providing advance exchange.

Ø Procedures for custom clearance to be simplified.

Ø Clearance of the parts by allowing for self -attestation by the MROs.

Ø Foreign aircraft brought to India for MRO work will be allowed to stay for 6 months. Beyond this, with DGCA permission .

Ø Persuade State Govt to make VAT zero-rated

Ø Airport royalty and additional levies to be rationalised in consultations with Airport Operators.

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