Govt Set To Reduce ATF Tax. 'Our Competition Is With Railways', Says Civil Aviation Minister

Aviation Minister Jyotiraditya Scindia said seven states and Union Territories of the country have reduced the value-added tax (VAT) on jet fuel to less than 4 per cent.

Possibility Of Cheaper Air Travel As Government Prepares To Reduce Tax On ATF: File Image

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New Delhi: After bringing down taxes on petrol and diesel, the government is now preparing to cut down taxes on Aviation Turbine Fuel (ATF), the fuel for air planes, to make air travel cheaper. Aviation Minister Jyotiraditya Scindia said seven states and Union Territories of the country have reduced the value-added tax (VAT) on jet fuel to less than 4 per cent.

Scindia said that Uttarakhand, Himachal Pradesh, Haryana, Madhya Pradesh, Jammu and Kashmir, Ladakh and Andaman Nicobar have reduced VAT on jet fuel to between 1-4 per cent. At present, there are more than 22 states and Union Territories where the VAT rate is more than 4 per cent. The Central Government has written to the Chief Ministers and Lieutenant Governors of other states requesting them to bring down the VAT.

Competing With Train Fares

Jyotiraditya Scindia said, "Our competition is with the railways. We are trying to reduce the airfare to an extent where passengers travelling in the AC two-tier railway coaches can travel by plane at the same cost. This requires reducing the tax rate and we are swiftly working to make it happen."

Air India Disinvestment by January

On the Air India disinvestment, Scindia said that work is being done at a rapid pace in this regard. We must keep in mind that there is an extensive process of disinvestment, which cannot be sidelined. He expressed hope that all the processes related to disinvestment of Air India will be completed by the end of December or January. The government has recently sold Air India to Tata Sons.

Tata Sons has bought Air India for Rs 18,000 crore. Under this deal, it will pay 15,300 crores of the debt incurred by the airline; the remaining Rs 2,700 crore will be paid to the government in cash.