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6% increase in ATF will have adverse effect: Rajesh Magow, MakeMyTrip

BUDGET 2016-17 REACTION

Rajesh Magow, Co-Founder and India CEO, MakeMyTrip.com

makemytrip, Rajesh Magow
Major investments and policy decisions in 2014 should pay off next year, feels Rajesh Magow feels

Developing 160 non-functional airports will improve connectivity within the country especially in Tier-II and beyond towns and cities and thereby, help boost the travel and tourism industry.

Increasing the excise duty on Aviation Turbine Fuel from 8% to 14% will have some adverse impact on the demand side of the industry; the financial health of the aviation industry of the country was just beginning to stabilise.

Lastly, service tax has now been increased to 15% from 14.5%. Krishi Cess at 0.5% will be levied on all taxable services. While it is understandable that this move is aimed towards financing initiatives for improvement of agriculture and welfare of farmers, this will lead to paid services becoming dearer.

The service tax has been consistently increasing over the past few years, it stood at 12.36% in 2013-14. Not only will service based companies but also the end consumer of the services will bear the brunt of this move.

 

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