Civil Aviation Minister Jyotiraditya Scindia on Saturday highlighted the government’s initiatives, noting that 31 states and Union Territories have lowered taxes on jet fuel. This move has significantly boosted the airline industry, which was already experiencing a rapid recovery following the challenges posed by the Coronavirus pandemic, he added.
Stressing the substantial economic benefits of the civil aviation sector, he further underscored that enhanced connectivity has driven significant economic growth.
Scindia on Air Turbine Fuel (ATF)
Scindia highlighted that Air Turbine Fuel (ATF) constitutes approximately 40 percent of an airline’s operational expenses. He mentioned that upon assuming the role of Civil Aviation Minister, he engaged with multiple states and Union Territories to lower the value-added tax (VAT) on jet fuel. He noted that initially, only 12 states and UTs imposed VAT ranging from 1-4 percent on jet fuel, while the remaining charged significantly higher rates of 20-30 percent.
Today, Scindia highlighted that 31 states and Union Territories are now imposing a VAT ranging from 1-5 percent on ATF, a move he described as providing a “huge fillip” to the airline industry. He added that the industry was experiencing a V-shaped recovery following the pandemic.
During the pandemic, the civil aviation sector faced substantial challenges, resulting in the suspension of flight services for a period. However, post-pandemic, the sector has shown resilience, with domestic air traffic witnessing an upward trend.
Scindia emphasised that increased connectivity has contributed to enhanced economic growth. For instance, in Srinagar, the reduction in ATF tax has led to a notable increase in earnings, ranging from 25-30 percent, as per the minister’s remarks.
Addressing an event organised by the society Rambhau Mhalgi Prabodhini, Scindia highlighted the ministry’s adoption of a holistic, whole-of-government approach.
(With PTI inputs)