Union civil aviation minister Jyotiraditya Scindia on Friday called for a reduction in value added tax (VAT) on aviation turbine fuel by states. Only 16 of the 24 states had responded positively to this proposal, Scindia said.
Speaking at the Mahratta Chambers of Commerce, Industries and Agriculture in Pune, Scindia said aviation turbine fuel accounted for 40% of the airlines’ cost structure. When he took over the aviation ministry, 12 states charged 1-4% VAT on ATF and 24 states/UTs charged 20-30%. At present, only eight states are charging VAT at 20-30% and 16 states had moved to the 1-4% VAT rates, he said.
Scindia said at a time when ATF prices had gone up from Rs 53,000 per kilo litre to Rs 1,41,000 per kilo litre, paying 20-30% VAT would not be viable for airlines. He urged Maharashtra, which was among the states charging high tax, to step forward and lower VAT as the whole country was moving in that direction and the traffic would move to the other states. Andhra Pradesh and Kerala had lowered VAT and enjoyed 15-20% greater connectivity, he said.
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Regarding expansion at the Pune Airport, the minister announced that the defence ministry had provided additional 14 slots per day for the Pune Airport, a defence-controlled airport. From Monday to Saturday, slots had gone up from 102 to 116 and slots on Sunday had gone up from 131 to 145. He called for improving international connectivity from Pune and said Vistara had applied for connectivity to Singapore.
The Pune Airport had a capacity of 7.7 million per annum and work had started on the new terminal building that would be ready in August 2023 and take capacity to 17 million with an investment of Rs 475 crore, Scindia said. The `120 crore multilevel car parking will be ready in October. Cargo capacity at the airport was being expanded from 25,000 metric tonnes to 43,000 metric tonnes by March ’23. An international air cargo terminal would come up in December 2024.