Hindustan Times (Gurugram) - - Nation - Faizan Haidar [email protected]­dus­tan­ ■

To lure air­lines into start­ing in­ter­na­tional op­er­a­tions from the An­daman and Ni­co­bar Is­lands and in­crease fre­quency of do­mes­tic flights, the is­land ad­min­is­tra­tion has de­cided to re­im­burse Value Added Tax (VAT) levied on air tur­bine fuel of new flights started be­tween now and March 31, 2019, ac­cord­ing to of­fi­cials fa­mil­iar with the devel­op­ment.

The Is­lands cur­rently levies 10% VAT on air tur­bine fuel (ATF). Its ad­min­is­tra­tion hopes to re­duce fares on new do­mes­tic flights through this move and egg on air­lines to start in­ter­na­tional flights to nearby coun­tries such as Sin­ga­pore, Thai­land and In­done­sia. “In an ini­tia­tive to in­crease fre­quency of flights and have more com­pet­i­tive/lower air­fares on the is­land-main­land sec­tor, the An­daman & Ni­co­bar ad­min­is­tra­tion has de­cided to re­im­burse the VAT on ATF paid on those in­cre­men­tal flights, which are in­tro­duced in the pe­riod up to March 31, 2019,” said an ad­min­is­tra­tion of­fi­cial not want­ing to be named.

Chetan Sanghi, chief sec­re­tary, An­daman and Ni­co­bar Is­lands, tweeted on Fri­day, “This should bring down the fares by in­creas­ing flights to Port Blair. We are watch­ing how air­lines re­spond to this. No one likes oligopolis­tic ex­ploita­tion.”

Fuel costs com­prise al­most 40% of air­lines’ ex­pen­di­ture. With ris­ing fuel prices and a weak­en­ing ru­pee, the avi­a­tion in­dus­try is in a mini cri­sis. Air­lines have been re­quest­ing the avi­a­tion min­istry to bring air tur­bine fuel un­der the Goods and Ser­vices Tax (GST).

Ac­cord­ing to an of­fi­cial of the Direc­torate Gen­eral of Civil Avi­a­tion (DGCA), the Air­ports Au­thor­ity of In­dia (AAI) would have to cre­ate cus­toms and im­mi­gra­tion posts at Port Blair air­port be­fore air­lines start in­ter­na­tional op­er­a­tions. The air fare from Kolkata or Chen­nai to An­daman is sel­dom less than ~6000, and in peak sea­son it goes upto ~30,000. Traf­fic at Port Blair air­port has been in­creas­ing over the past three years, ac­cord­ing to data avail­able with the DGCA. In 2017-18, the air­port han­dled 15.49 lakh pas­sen­gers against 12.38 lakh the year be­fore and 8.71 lakh in 2015-16.

› ...An­daman & Ni­co­bar ad­min­is­tra­tion has de­cided to re­im­burse the VAT on ATF paid on those in­cre­men­tal flights. AD­MIN­IS­TRA­TION OF­FI­CIAL

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