Citing the huge demand for air travel particularly after the Covid pandemic, Union Civil Aviation Minister Jyotiraditya Scindia on Tuesday urged seven states and one union territory to reduce tax on jet fuel.
The Minister made the remarks while addressing the Civil Aviation Ministers’ conference here.
Scindia said that air traffic growth will be driven by smaller cities, adding that the Value Added Tax (VAT) on jet fuel is still high in Goa, Assam, Delhi, Maharashtra, West Bengal, Rajashthan, Bihar and Tamil Nadu in the range of 20-30 per cent.
Jet fuel cost accounts for a major part of an airline’s operational costs and many states have already reduced the taxes in the last couple of months.
The Minister stressed on 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.
He said that the the country’s civil aviation sector as a towering phoenix, and operating seamlessly in a high-demand environment compared to issues faced by travelers and airports in different parts of the world.
Taking cognizance of the high VAT on ATF being levied earlier, the issue was taken up by the Ministry with the states/union territories.
As a result, VAT on ATF has been reduced by Andaman & Nicobar Islands, Uttarakhand, Jammu & Kashmir, Ladakh, Himachal Pradesh, Tripura, Madhya Pradesh, Haryana, Karnataka, Uttar Pradesh, Gujarat, Dadra & Nagar Haveli and Daman & Diu, Arunachal Pradesh, Manipur, Jharkhand and Mizoram.
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