VAT will be brought down to 4 per cent to promote state’s mini-airports
Picture used for representational purpose (Photo: DC/File)
Hyderabad:The AP government has offered to cut VAT on aviation turbine fuel, if airlines increase inter-state operations and also operate hopping instead of non-stop flights.
The VAT on aviation turbine fuel will be reduced from 16 per cent to a minimum of one to four per cent. The move is aimed at increasing air traffic for the proposed 14 airports in Andhra Pradesh, which will indirectly boost investments and tourism.
AP state government’s media advisor Parakala Prabhakar said, “Increasing air connectivity to economically potential and tourist cities and towns in Andhra is a top priority for the government. Restoration of old airports and constructions of new airports in 14 locations is also on the agenda of the AP government.”
He added, “There are several cities and towns identified, like Srikakulam, Bheemili, Tadepalligudem, for mini-airports. For instance at Tadepalligudem, a World War II airstrip already exists. It was left unused and was encroached. We need to work on it and it can become functional quickly.”
The official adds, “The state is in talks with airliners like Spicejet and Indigo. Indigo officials will shortly meet Chief Minister N. Chandrababu Naidu. The VAT will be lowered, if the flights stop in between instead non-stop flying. For instance, a flight from Hyderabad to Visakhapatnam or vice versa can make a stop at Srikakulam or Tadepalligudem. All the 14 places have tourism and economic potential.”
The state government has already announced to develop Vijayawada, Visakhapatnam and Tirupati airports as international airports. It will also develop mini airports in all districts.
In January 2010, the government of undivided Andhra Pradesh had hiked VAT on aviation turbine fuel from four per cent to 16 per cent.
Aviation experts said that when tax on ATF was lowest in AP, prior to 2010, the main airlines had made Hyderabad their re-fuelling hub. Now they can do it in Andhra, if VAT is slashed to one to four per cent. Most states charge more than 20 per cent VAT on ATF.
According to a report submitted by Deloitte to the civil aviation department for promotion of regional and remote area air connectivity in India, Vijayawada, Guntur, Kakinada are on the priority list of towns based on population, economic potential and lack of proper existing connectivity. The additional list based on potential and lack of connectivity includes Nellore, Kurnool, Kadapa, Tirupati, Anantapur and Ongole.
( Source : dc )
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