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Jyotiraditya Scindia urges Punjab, 7 other states to lower tax on jet fuel
Union civil aviation minister Jyotiraditya Scindia made the request to Punjab, Assam, Maharashtra, West Bengal, Delhi, Tamil Nadu, Rajasthan, and Bihar governments to reduce VAT for the growth of civil aviation sector in their states
Union civil aviation minister Jyotiraditya Scindia on Tuesday urged Punjab, West Bengal, Delhi and five other states to reduce VAT on air turbine fuel (ATF) for facilitating air connectivity to tier 2 and 3 cities.
He made the request to Punjab, Assam, Maharashtra, West Bengal, Delhi, Tamil Nadu, Rajasthan, and Bihar governments to reduce VAT for the growth of civil aviation sector in their states.
Scindia promised to increase aeroplane connectivity in these eight states if they reduce VAT on ATF.
“I urge you (eight states) politely to reduce VAT on ATF. I promise you to increase the aeroplane connectivity in your states,” Scindia said while speaking at the concluding session of a two-day conference of ministers of civil aviation of all states and union territories here in the national capital.
The minister said there were 12 states who had far-sighted views on this issue and they had lowered VAT on ATF months ago. “Therefore they had increased travel to their states because aeroplanes will go where raw materials are cheap. And ATF constitutes between 45-50% of the total cost of the airline sector,” he added.
The minister made the announcement while noting that the growth rate in such cities increased to 21% between 2015 and 2020 which was 10% between 2010 and 2015.
“... It is estimated that the new growth is going to come from tier 2 and tier 3 cities,” said the minister.
Pointing to Prime Minister Narendra Modi’s vision to “democratise” the civil aviation sector, Scindia said the civil aviation sector is not meant for a chosen field, it must be for the common man.
“So, the consistent effort of this government is to concentrate on the development of airport infrastructure in smaller cities which will be the new growth area in the days to come,” said the Minister.
Explaining ‘UDAN’ scheme, a regional airport development program of the Government of India and part of the Regional Connectivity Scheme of upgrading under-serviced air routes to make air travel affordable and improve economic development in India, Scindia said, “We built 70 new airports in last six years under UDAN scheme. Nearly 2.10 lakh flights could manage to fly under UDAN scheme, and nearly 1.10 crore passengers could travel under the scheme. These 1.10 crore people were among those who had never imagined of travelling through air.”
As far as connectivity is concerned, Scindia said, “We have been able to connect multiple new centres and states.”