HYDERABAD:The Civil Aviation Ministry urged state governments on Thursday to decrease Value Added Tax (VAT) on aviation fuel to decrease the burden on airline players and make air travel more affordable.VAT on Aviation Turbine Fuel (ATF) differs from state to state, and is considered as huge burden on airline operators with tax standing at about 25 per cent on an average nationally.
“There are about 400 million middle class people in India and if each one of them buy at least one ticket, 400 million tickets will be sold. But for that to happen, air tickets have to be made affordable. There are certain challenges like lack of land for airports expansion, high aviation fuel costs and others. State governments should consider decreasing the tax on aviation fuel, to decrease burden on airline operators,” said RN Choubey, Secretary of Civil Aviation, speaking at the inaugural of Wings India 2018 the flagship event of aviation sector in Hyderabad.
The four-day conference has participation from aircraft manufacturers, airline players,Civil Aviation Ministry, more than 20 states and others stakeholders from the aviation ecosystem.
“Already states like Assam, Andhra Pradesh, Arunachal Pradesh have decreased the tax on aviation fuel to 1 per cent, as sweetener to ensure that airline players operate more flights to the airports in their states.“Other states also should do the same as the decreasing VAT on ATF will only boost aviation sector and help states,” further said RN Choubey.