India’s Directorate of Revenue Intelligence has slapped a $3.3 million penalty and fine on New Delhi-based Bharat Hotels for not paying customs duty on the Embraer Legacy 600 it imported for charter services in 2009.
The Reserve Bank of India allows six months to provide proof of import from the time money is sent out of the country for payment. Bharat Hotels flaunted this rule with a foreign-registered aircraft that was imported with duty and continued to fly around India. Customs duty for private use of aircraft in India is 18 percent and for charter operations 2.5 percent.
“This gives general aviation a bad name,” an Indian government official told AIN. He added however, there are too many rules with loopholes bordering on grey areas. “Unfortunately, violations bring in more stringent checks and knee-jerk reactions by the government,” he said.
For instance, new rules announced in the latest Indian government budget on March 16 have reduced from six to two months the time limit for a foreign-registered aircraft to fly in India, after which it has to be registered locally after payment of appropriate taxes.
Representatives of the Indian business aviation community have claimed that the rules flaunt the Chicago Convention that permits a business aircraft to operate for a six-month period in a country where it has not been registered.