Civil Aviation Minister urges States to rationalize VAT on Aviation Turbine Fuel across all airports within range of 1 to 4%

Civil Aviation Minister Jyotiraditya Scindia has urged the States and Union Territories to rationalize value-added tax (VAT) on Aviation Turbine Fuel across all airports within the range of one to four per cent. The price of ATF is a major component of the operating cost of airlines.

He has written a letter to 22 States and UTs in this regard. Mr Scindia asked them to take forward common intention to boost air travel and connectivity in State with a view to accelerate its economic development.

Citing examples of progressive states such as Kerala, Andhra Pradesh, Meghalaya, Nagaland, Sikkim and Telangana, the Minister wrote that they have brought down the VAT to one per cent and even below. As a result, they have seen a substantial jump in the number of aircraft movements in their states.

He said, the Government of Kerala has brought down VAT on ATF from 25 per cent to one per cent. He said, now the number of aircraft movements at Thiruvananthapuram airport increased from around 21,000 flights to 23,000 flights in a span of six months.

The Minister said that air connectivity directly promotes tourism growth, output growth and employment generation, in addition to various indirect benefits to the economy.

Besides, Mr Scindia has also written letters to the Chief Ministers of Andhra Pradesh, Arunachal Pradesh, Assam, Bihar and Chhattisgarh and sought their personal intervention in expediting the development of airports.

In the letter, Mr Scindia has requested them to instruct the concerned officers to initiate action for expediting various matters like land allocation, deposition of funds with Regional Air Connectivity Fund Trust and viability gap fund support for International UDAN operations for strengthening of aviation infrastructure.

Airport Authority of India, AAI has embarked upon the development and expansion of airports in the country at a cost of Rs 20,000 crore in the next 4 to 5 years in order to meet the growing passenger traffic in the country.