Cus Cir No. 65/2001 Date 19/11/2001

Leviability of customs duty on fuel and other stores consumed on board during extension flights in domestic sector-reg.
A reference has been received from the Ministry of Civil Aviation requesting the Boardto allow duty free supply of fuel and stores to domestic extension flights of Air Indiawhich ply between two airports in India carrying international as well as domesticpassengers. Such extension flights are presently operating between Mumbai andAhmedabad/Hyderabad/Goa/Calicut etc. The Ministry of Civil Aviation has requestedthat such extension flights should be treated as foreign going aircrafts, as these carryinternational passengers from an international airport in India. Most of the passengers onsuch extension flights are stated to be either in bound or out bound to internationaldestinations. These flights allow passengers to travel between an international destinationand an Indian airport such as Ahmedabad/Hyderabad/Goa/Calicut etc. on a single flightcoupon.

2. The matter has been examined. It is seen that these extension flights ply between twoIndian airports without a trip to a foreign airport on their voyage. They are assigneddifferent flight numbers and IGM/EGM No. per voyage, and ferry passengers within theterritory of India only. Further, these flights are stated to have no co-relation of any sortwith the flights which have arrived from or are bound to a foreign port at the point ofloading or off-loading. It has, therefore, been felt that the extension flightsoperating between two Indian airports cannot be considered as foreign going aircraft, as section 2(21) of the Customs Act, 1962 defines ‘foreign going aircraft’ as an aircraft forthe time being engaged in the carriage of passengers between an airport in India and anyairport outside India, whether touching any intermediate airport in India. The domesticextension flights cannot be considered similar to flights which operate between an airportin India and an airport abroad, touching one or more Indian airports in between. Section 87 of the Customs Act, 1962 allows imported stores to be consumed without payment ofduty in a foreign going aircraft. It has, therefore, been decided that the extension flightsoperated by Air India between Mumbai and other airports or between two airports inIndia would not be entitled to duty free supply of fuel and other stores.

3. These instructions may be brought to the notice of all concerned by way of issuance ofsuitable Public Notice/Standing Order.

4. Difficulties, if any, in implementation of these instructions, may be brought to thenotice of the Board. Kindly acknowledge receipt of this Circular.

Sd/-
(Rajendra Singh)
Under Secretary to the Government of India

(Please refer Cus Cir No.33/2002 date 25/06/2002)

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