Business
Reduce value added tax on jet fuel: industry body
New Delhi, Jan 30
Industry lobby PHD Chamber
Friday urged state governments to reduce value added tax (VAT) on jet
fuel to increase connectivity and passenger traffic.
The
recommended cut in VAT on jet fuel from the average rate of 22 percent
to less than five percent was made as part of PHD Chamber-GMR Aviation
Summit 2015 which was held here.
The white paper released on the
occasion on "Developing Regional and Remote Connectivity" by senior
government functionaries and industry representatives demanded that
lowering taxes on ATF (air turbine fuel) would fuel connectivity to
regional air and cargo hubs.
The industry lobby cited the
increase in aviation activity in Chhattisgarh after the state reduced
the VAT on ATF from 20 percent to four percent.
The connectivity
and air traffic also increased substantially in states such as Goa,
Madhya Pradesh and Jharkhand as these states curtailed VAT on ATF.
"Therefore,
other states should follow suit for which the central government can
undertake persuasive initiatives and efforts," said Gopal Jiwarajka,
vice president, PHD Chamber.
The chamber's chairman of civil
aviation committee K.Narayana Rao said that all stakeholders in the
sector, such as the central and state governments, airports, regional
airlines, need to work together on the issue of regional and remote air
connectivity.