NEW DELHI, Oct 18:Â Union Civil Aviation minister Jyotiraditya Scindia on Tuesday urged eight states and Union Territories to reduce tax on jet fuel as there is a huge demand for air travel after the Covid-19 pandemic. The minister was speaking at the Civil Aviation Ministers’ conference in the national capital.
Domestic air traffic is inching closer to the pre-Covid level and in recent times, the daily passenger numbers crossed the four lakh mark twice, as per PTI reports.
The minister said that air traffic growth will be driven by smaller cities. He also asserted that Value Added Tax (VAT) on jet fuel is still high in eight states and Union Territories in the range of 20-30 percent and urged them to reduce the rate.
Jet fuel cost accounts for a significant part of an airline’s operational costs. These eight states and Union Territories include Goa, Assam, Delhi, Maharashtra, West Bengal, Rajasthan, Bihar, and Tamil Nadu, PTI reported.
“New growth to come from Tier 2 and 3 cities,” he said and emphasized the need to bring down entry barriers in the context of high VAT on jet fuel in some states.
Currently, 28 states and Union Territories have VAT on jet fuel in the range of 1-4 percent, he added.
He described the country’s civil aviation sector as a ‘towering phoenix’, and operating seamlessly in a high-demand environment compared to issues faced by travelers and airports in different parts of the world.
Last month, the price of ATF (aviation turbine fuel) saw a price cut in Delhi after the Central government raised the windfall profit tax on jet fuel exports. The price of jet fuel was cut by 0.7% ( Rs 874) to Rs 1.21 lk/kl from Rs 1.22/kl in the national capital.
The Centre had increased the windfall profit tax on ATF to Rs 9 a litre. The tax on Aviation Turbine Fuel exports had been hiked from Rs 2 per litre from September 1 this year. (PTI)
