Monday, March 02, 2020

Mangaluru loses out with 28% VAT on airline fuel against Kannur's 1%

Mangaluru: Because of exorbitant value added tax (VAT) being levied in Karnataka on Airline turbine fuel (ATF) as compared to Kannur in Kerala, new flights are dithering to fly from Mangaluru as Kannur is more lucrative. As such, it is learnt that there was considerable decline in both the number of flights and passengers served at the local airport during last year.

The state has been levying VAT of 28 percent on aviation fuel whereas in Kannur the rate stands at only one percent. Kannur is just 175 km away from Mangaluru. Automatically airfares from Kannur are considerably less as compared to Mangaluru. The concession in VAT is given only for Kannur by the chief minister. Even though this step has attracted criticism and political tussle there, it has proved to be detrimental for Mangaluru airport.
During the period from April to November 2019, Mangaluru airport has recorded 23 percent decline in passenger traffic. Number of flights too came down from 13,960 to 10,416 particularly because of the exit of Jet Airways and no other operators have introduced as many flights in its place.
02/03/20 daijiworld
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