Govt may alter I-T Act to give tax sops to AAI

NEW DELHI: The government is likely to propose a tax holiday for Airports Authority of India (AAI) even though it is not registered as a company in order to help it in launching its ambitious programme of airport modernisation, informed sources said on Monday. In order to do this, modifications in the existing provisions of the Income-Tax Act are required so as to enable bodies like AAI to get tax benefit as in the case of the National Highways Authority of India (NHAI), they said. The sources said suitable amendments in the Act were being considered to exempt AAI from paying taxes on foreign exchange earnings it receives from foreign airlines in return for the services it provides to them at various international airports across the country. The NHAI, which has been developing the road network across the country, has been getting exemption under the Act, whereas AAI was not getting the same benefit because of the restrictions placed in the law. AAI, which is not a registered company under the Company's Act, has plans to modernise and upgrade over 40 of the existing 65 airports in different parts of the country. The civil aviation ministry and the finance ministry are already in talks, following a Union Cabinet decision, to launch modernisation of four metro airports on a fast-track basis. In this context, the proposal to exempt AAI from the income-tax net would go a long way in achieving fast-track development of airports, sources added. A decision on launching a modernisation project for these four airports was likely to be taken within a month, sources said. The cabinet has asked finance minister Jaswant Singh and civil aviation minister Shahnawaz Hussain to chalk out the modalities so that these airports were developed to international standards at the earliest. — Agencies Both the ministers are likely to soon revert to the cabinet after fine-tuning the proposal as the government wanted the metro airports to be developed soon. The options of leasing, creation of joint ventures between AAI and the selected private parties and budgetary funding of the modernisation plans are understood to be under consideration. The cabinet on January 3 had deferred a decision on airport privatisation and had asked the two ministers to chalk out modalities within a month. The issue has been hanging fire since Prime Minister Atal Bihari Vajpayee announced it in 1999. The cabinet had earlier proposed leasing of the airports but later changed the option to setting up of joint ventures. But now it would also consider granting budgetary support for the purpose.

Govt may alter I-T Act to give tax sops to AAI

The government is likely to propose a tax holiday for Airports Authority of India (AAI) even though it is not registered as a company in order to help it in launching its ambitious programme of airport modernisation, informed sources said on Monday.

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