Nepal | March 31, 2020

MoF vows to address AOAN concerns

Himalayan News Service

Kathmandu, June 5

Airline Operators’ Association of Nepal (AOAN) has rolled back its earlier announcement to halt services of all domestic airlines as the Ministry of Finance (MoF) has assured of a feasible solution to their concerns on customs tax on spare parts of aircraft.

“We called off our protest after we received a message from ministry that the earlier customs tax will be levied in the import of spare parts until further notice,” said Pabitra Kumar Karki, president of AOAN.

According to Karki, the ministry has said that it will call AOAN for a meeting next week to discuss the matter. “They have assured us of a feasible solution that will favour our sector,” Karki said, adding, “Till then, we can import aircraft spare parts paying one per cent customs tax.”

According to Karki, domestic airline firms have been paying one per cent customs tax for import of spare parts from the very beginning. However, misinformation among the concern authorities resulted in this situation. As per Karki, the 55th annual report of the Office of Auditor General (OAG) had mentioned that airline companies were not paying customs tax on spare parts.

“Except for a few, all the spare parts of aircraft have been listed under ‘other spare parts’. So, OAG reported that we were not paying customs tax, which is false,” he said, adding, “After that, customs office had halted the release of aircraft spare parts.”

While the matter was sorted out back then, airline companies were startled to find that the Finance Act, which was unveiled on May 29, had hiked the customs tax on ‘other spare parts’ of aircraft to 30 per cent from one per cent earlier.

Subsequently, on June 3, the AOAN had issued a press release requesting the concerned authorities to sort out the issue at the soonest or that they would halt their services from June 6.

A version of this article appears in print on June 06, 2019 of The Himalayan Times.

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