States asked to cut VAT on Avi­a­tion Tur­bine Fuel

Hindustan Times ST (Jaipur) - - Nation - Faizan Haidar faizan.haider@hin­dus­tan­times.com

A day af­ter the cen­tral govern­ment cuts ex­cise duty on Avi­a­tion Tur­bine Fuel (ATF), the civil avi­a­tion min­istry said that they are in talks with state gov­ern­ments to cut VAT on ATF. Since air­lines are re­luc­tant to hike fare, the move will ben­e­fit pas­sen­gers. The avi­a­tion in­dus­try in cur­rently go­ing through a tough phase due to ris­ing fuel prices and de­pre­ci­at­ing ru­pee.

The air­lines has also been re­quest­ing the avi­a­tion min­istry to bring ATF un­der GST.

When asked about the pack­age to re­vive the air­lines, civil avi­a­tion sec­re­tary RN Choubey said, “Pack­age may not come in one go, for ex­am­ple the first one has come al­ready by way of re­duc­tion in the ex­cise duty. So we are still work­ing on some other mea­sures. We will re­quest the state govern­ment to cut VAT on ATF.”

Choubey said that the ef­fort is on to bring ATF un­der GST but there is an is­sue of rev­enue neu­tral­ity.

The cen­tral govern­ment re­duced ex­cise duty on ATF from 14% to 11%. With ev­ery state charg­ing VAT on ATF from the range of 5-30%, the cost in­creases sig­nif­i­cantly. Tamil Nadu levies 29% state tax while the VAT on ATF in Delhi and Ma­ha­rasthra is 25%. States like Odisha and Ch­hat­tis­garh charges 5% VAT to at­tract more flights.

On the fi­nan­cial as­sis­tance to Air In­dia, Choubey said that by the end of this month some­thing con­crete will hap­pen.

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