Scindia: Need to rationalise tax rates on ATF

New Delhi, September 9

Emphasising the need to rationalise tax rates on jet fuel, Civil Aviation Minister Jyotiraditya Scindia today said lower rates would bring in more flights and act as an economic multiplier that would be “50 to 100 times more” than what states earned from a low level of revenue from Value Added Tax (VAT).

Aviation turbine fuel (ATF) cost is a significant component of the operational expenses of carriers and the ministry has been pitching for lower rates to boost the airline industry.

“A certain state may collect as little as one per cent VAT on the ATF, while another state can charge up to 30 per cent. Tax rates must be rationalised if we want to promote the aviation sector. The states which have the foresight to keep VAT rates low are attracting more carriers,” he told the media here today.

Scindia further said he had written to CMs of 29 states and flagged the matter. — TNS