Value Added Tax(VAT) has been reduced on Aviation Turbine Fuel (ATF) by 4 states and Union Territories. Uttarakhand has reduced it to 2 per cent while Haryana, Andaman & Nicobar Islands, and Jammu & Kashmir have decreased it to 1 per cent.
This is a welcome step that would allow airlines to operate with less cost, leading to reduced airfares and increased connectivity to more places.
Last month, the Union Civil Minister had written to 22 states and Union Territories requesting them to reduce VAT. He has thanked the state governments for accepting his recommendation in supporting the aviation industry. Kerala, Andhra Pradesh, Meghalaya, Nagaland, Sikkim, and Telangana have previously reduced the VAT on ATF.
The Ministry of Civil Aviation has previously requested the Ministry of Finance to bring ATF under the GST umbrella, to make civil aviation more accessible. This is currently pending with the GST Council.
(With Inputs From Economic Times)