Bhopal: Airlines planning to start operations from the Raja Bhoj airport want the state government to reduce value-added tax (VAT) on aviation turbine fuel (ATF).
At present, Bhopal airport charges 25% VAT and airlines feel that if ATF cost is reduced, they can connect more flights with Bhopal. Notably, Spice Jet and IndiGo will start operations from the first week of January.
IndiGo will start operations from Bhopal and Jabalpur and connect Hyderabad, while Spice Jet will start operations from the state capital to connect Ahmedabad, Shirdi, Hyderabad and Jaipur.
In the recent past, airlines had demanded the reduction in VAT on ATF on a regular basis. Since ATF constitutes around 40% of overall cost of running a flight, airlines have been requesting the state government to reduce VAT on an immediate basis.
Seeking anonymity, airlines officials said, "Lowering VAT on ATF will make a strong case for them to consider expanding or starting operations from Bhopal. Nearby states such as Chhattisgarh, Andhra Pradesh, Rajasthan, Jharkhand have reduced VAT on ATF and are witnessing increased connectivity from various airlines."
Incidentally, the state government had reduced VAT from 24% to 5% five years ago, but it could not help in attracting more airlines. Two years ago, the state government increased VAT on ATF and made it 25%. However, the government during a recent discussion with the Confederation of Indian Industry, airlines and others had assured that it will reduce VAT on ATF if airlines show interest to ramp up connectivity.
Supporters of the online campaign 'Support Bhopal for Air Connectivity' (SBFAC) also felt that after two important airlines have shown positive attitude by announcing to start operations, the state government should also bring down VAT on jet fuel.
"Recently, Spice Jet officials met online campaigners and travel agencies. They are very positive in starting more operations from Bhopal and have assured us in this regard. In such a situation, the state government should also think of reducing taxes on jet fuel," said online campaigner Neeraj Singhal.
An informal gathering of flyers was organized at Arera Colony on Sunday. "We are all extremely positive. When things are going in the right direction, it is obvious to expect that airlines would seek a reduction of VAT on jet fuel," added Singhal.
10/12/18 Ramendra Singh/Times of India
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At present, Bhopal airport charges 25% VAT and airlines feel that if ATF cost is reduced, they can connect more flights with Bhopal. Notably, Spice Jet and IndiGo will start operations from the first week of January.
IndiGo will start operations from Bhopal and Jabalpur and connect Hyderabad, while Spice Jet will start operations from the state capital to connect Ahmedabad, Shirdi, Hyderabad and Jaipur.
In the recent past, airlines had demanded the reduction in VAT on ATF on a regular basis. Since ATF constitutes around 40% of overall cost of running a flight, airlines have been requesting the state government to reduce VAT on an immediate basis.
Seeking anonymity, airlines officials said, "Lowering VAT on ATF will make a strong case for them to consider expanding or starting operations from Bhopal. Nearby states such as Chhattisgarh, Andhra Pradesh, Rajasthan, Jharkhand have reduced VAT on ATF and are witnessing increased connectivity from various airlines."
Incidentally, the state government had reduced VAT from 24% to 5% five years ago, but it could not help in attracting more airlines. Two years ago, the state government increased VAT on ATF and made it 25%. However, the government during a recent discussion with the Confederation of Indian Industry, airlines and others had assured that it will reduce VAT on ATF if airlines show interest to ramp up connectivity.
Supporters of the online campaign 'Support Bhopal for Air Connectivity' (SBFAC) also felt that after two important airlines have shown positive attitude by announcing to start operations, the state government should also bring down VAT on jet fuel.
"Recently, Spice Jet officials met online campaigners and travel agencies. They are very positive in starting more operations from Bhopal and have assured us in this regard. In such a situation, the state government should also think of reducing taxes on jet fuel," said online campaigner Neeraj Singhal.
An informal gathering of flyers was organized at Arera Colony on Sunday. "We are all extremely positive. When things are going in the right direction, it is obvious to expect that airlines would seek a reduction of VAT on jet fuel," added Singhal.
10/12/18 Ramendra Singh/Times of India
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