Scindia urges Assam and 7 others states to reduce VAT on aviation fuel

Guwahati, Oct 18: Assam is one of the seven states in the country besides the Union Territory of Delhi which impose high rate of Value Added Tax (VAT) on aviation fuel (jet fuel). The seven states are:  Assam, Goa, Maharashtra, West Bengal, Rajasthan, Bihar and Tamil Nadu.

The VAT on jet fuel in these states and Delhi is in the range of 20-30 per cent while other 28 states and Union Territories have VAT on jet fuel in the range of 1-4 per cent, according to Union Civil Aviation Minister, Jyotiraditya Scindia.

The Civil Aviation Minister has, therefore, urged Assam and the six other states as well as the Union Territory of Delhi to reduce VAT on jet fuels to capitalise on the huge demand for air travel particularly after the Covid pandemic.

The Minister made the remarks while addressing a conference of civil aviation ministers of states and UTs in New Delhi today. He further said that air traffic growth will be driven by smaller cities and jet fuel cost accounts for a major part of an airlines’ operational costs.

Many states including Arunachal Pradesh, Manipur, Tripura, Mizoram, Jharkhand, Andaman & Nicobar Islands, Uttarakhand, Jammu & Kashmir, Ladakh, Himachal Pradesh, Madhya Pradesh, Haryana, Karnataka, Uttar Pradesh, Gujarat, Dadra & Nagar Haveli and Daman & Diu have already reduced the taxes in the last couple of months after the Ministry had taken up the issue of high rate of VAT on Aviation Turbine Fuel (ATF).

 
Scindia stressed on the need to bring down entry barriers in the context of high VAT on jet fuel in the states where the rate is still on higher side.
He termed the country's civil aviation sector as a towering phoenix that is operating seamlessly in a high-demand environment compared to issues faced by travellers and airports in different parts of the world.