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  • Writer's picturePrabhjot Singh Maan

Aviation Minister Scindia urges states to reduce Tax on Jet Fuel

Updated: Oct 25, 2022

In light of the COVID-19 pandemic's positive impact on air travel, Union Civil Aviation Minister Jyotiraditya Scindia has urged eight states and union territories to lower their taxes on jet fuel.

The BJP leader stressed the importance of creating airport facilities in smaller cities when he stated that smaller cities will drive the rise in aviation traffic. He was speaking at a Civil Aviation conference in Delhi.

Domestic aviation travel has just surpassed the four lakh passenger barrier twice, moving closer to pre-COVID levels.

Value-added tax (VAT) on jet fuel remains high in eight states and Union Territories, ranging from 20 to 30 percent, according to Scindia, who urged them to lower the excessive levy. The cost of jet fuel makes up a considerable portion of an airline's operating expenses.

The minister requested that the VAT on aviation turbine fuel be reduced in Goa, Assam, Delhi, Maharashtra, West Bengal, Rajasthan, Bihar, and Tamil Nadu (ATF).

"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.

According to him, there is already a VAT on jet fuel in 28 states and union territories that ranges from 1-4 percent.

In comparison to problems seen by travelers and airports throughout the world, he referred to the nation's civil aviation industry as a "towering phoenix" that runs smoothly in a high demand environment.

Scindia emphasized that last-mile connection is crucial and that civil aviation must be for everyone, not just a select few.

He also advocated for the construction of airport facilities in smaller cities, which are expected to experience rapid expansion in the near future.

There are 141 active airports right now, including heliports and waterdromes.

According to Scindia, the government and the private sector are set to invest over Rs 95,000 crore in the airports industry over the next four years. The money will be used for both brownfield and new airport construction.

The Airports Authority of India is constructing three to four new greenfield airports and expanding about 40 existing airports. Similar to this, 60 brownfield airports and 3 new airports are being built by the private sector.

According to the minister, there are already 141 airports (including helipads and waterdromes) and that number is expected to reach 200 in the next 4-5 years.

The minister stated that 15 additional Flying Training Organizations (FTOs) will be established in the industry.

He added that the European business Safran will spend about $150 million to build an aircraft engine maintenance plant in India.

After being affected by the epidemic, the nation's civil aviation industry is now on the road to recovery. We've gone through some really tough times, added Scindia.

Gen (Retd) V K Singh, Union Minister of State for Civil Aviation, stated during the conference that helipads ought to be located in each district.

The number of domestic passengers reached 4 lakh on October 9 and began to approach pre-COVID levels.

According to official statistics, 1.01 crore passengers were transported by Indian airlines in August, a 4% increase over the traffic seen in July.

Source: Click Here...

Edited By: Prabhjot Singh Maan ( LinkedIn ).
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