Thursday, October 14, 2021

Four states & UTs reduce VAT on ATF, Union Civil Aviation Minister applauds the efforts

Four states and Union Territories - Uttarakhand, Haryana, Jammu & Kashmir and Andaman & Nicobar Islands have reduced Value Added Tax (VAT) on Aviation Turbine Fuel (ATF), a step which can allow breather to airlines to operate flights with less operating cost, leading to possible reduction on air fares and more importantly increasing air connectivity to more destinations.

Uttarakhand has reduced the VAT to 2 per cent while Haryana is slashed it to just 1 per cent from earlier applicable 20 per cent. Similarly, Andaman and Nicobar and Jammu & Kashmir administration have brought it down to 1 per cent.

Union Civil Minister has appreciated the efforts and thanked the state government to support the aviation industry and accept his earlier recommendations of reducing the tax. Last month, the Minister had written to 22 States and Union Territories appealing to them to reduce VAT. States like Kerala, Andhra Pradesh, Meghalaya, Nagaland, Sikkim and Telangana have already reduced the VAT of ATF.

"I would urge the remaining states to emulate and get on to the bandwagon of greater regional connectivity and reduce the tax on ATF. Lower operational costs for airlines has a causal effect on flight connectivity. Given the disruption caused by the pandemic, it is important that states collaboratively work with the Civil Aviation Ministry to not just bring the sector back on track, but also trigger greater economic activity in their respective regions. I, again, request states to consider the request and open the doors of development and employment opportunities at the earliest," said Scindia.

14/10/21 Manas Dwivedi/ET Energy World

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