With air traffic recovering post the COVID-19 pandemic, Union Civil Aviation Minister Jyotiraditya Scindia has appealed to eight states and union territories to reduce taxation on jet fuel.
Speaking at a Civil Aviation conference in Delhi, the BJP leader said that air traffic growth will be driven by smaller cities, adding emphasis on the need for developing airport infrastructure in such places.
Domestic air traffic is inching closer to pre-COVID level and in recent times, daily passenger numbers have crossed the four lakh mark twice.
Scindia said that value-added tax (VAT) on jet fuel is still high in eight states and Union Territories in the range of 20-30 percent and urged them to reduce the high levy. Jet fuel costs account for a significant part of an airline's operational cost.
The minister requested Goa, Assam, Delhi, Maharashtra, West Bengal, Rajasthan, Bihar and Tamil Nadu to reduce the VAT on Aviation Turbine Fuel (ATF).
"New growth to come from Tier 2 and 3 cities," he said and emphasised the need to bring down entry barriers in the context of high VAT on jet fuel in some states.
Currently, 28 states and Union Territories have VAT on jet fuel in the range of 1-4 per cent, he added.
In the next four years, Scindia said that around Rs 95,000 crore is likely to be invested by the government and the private sector in the airports sector. The investment will be for both brownfield and greenfield airports.
The Airports Authority of India is working on expansion of about 40 airports and setting up of 3-4 new greenfield airports. Similarly, private sector is working on 60 brownfield and 3 greenfield airports.
18/10/22 Economic Times
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