Govt. : VAT on aviation turbine fuel reduced

The Jammu and Kashmir administration on Monday reduced the Value Added Tax (VAT) on the Aviation Turbine Fuel (ATF) for airlines operating in J&K region, from the existing twenty six per cent to one per cent.

As cheaper fuel will reduce the operating cost for the airlines, they are likely to pass on the benefits to the travelers by reducing the airfares.

“….In scheduled appended to the said notification, in S. No3 ( Aviation Turbine Fuel), in column 3 for the figure and sign 26.25% the figure and sign 1% shall be substituted” reads an order issued by the Finance Department of the J&K Government dated 11.10.2021.

The move to slash the VAT on ATF comes three days after the Administrative Council (AC), which met here under the chairmanship of Lieutenant Governor, Manoj Sinha, reduced the sales tax on ATF to one per cent.

These decisions are part of slew of measures taken by the Government recently to promote air traffic to Jammu and Kashmir. With the reduced airfare on account of reduction in Sales Tax and VAT on ATF, the air-traffic is expected to increase which will boost both tourism and economic activities in the region.

Earlier last month, the Government of India removed the 30 per cent “load penalty” on airlines operating to Jammu airport. The 30 per cent load penalty restricted the number of passengers an aircraft could carry to 70% but its removal has proved to be a big breather for the aviation sector in this region.

Passenger traffic at the Jammu airport jumped soon after the load penalty for the strategically important airport was scrapped, allowing airlines to fly full capacity, officials said.

The airport saw 1,403 embarkations (departures) and 1,679 disembarkation (arrivals) on September 29. On September 30, when the penalty was scrapped, the number of departures jumped to 1,524 and disembarkations to 2,140, officials aware of the matter said.

On October 1, traffic further increased to 1,953 embarkations and 2,748 disembarkations, they said. Prior to the September 30 move, there was a 30 per cent load penalty, which meant that airlines could book only 70 per cent of the seats available on a flight.

It may be mentioned that Civil Aviation Minister Jyotiraditya M Scindia has recently announced that two new airport terminals will be established in Jammu and Srinagar. Days after this announcement, the Jammu and Kashmir government transferred land to Airport Authority of India (AAI) for expansion of Jammu airport. The land to the tune of 974 kanal has been transferred in village Rakh Raipur, tehsil Jammu South free of cost to AAI under the National Civil Aviation Policy 2016. The state departments namely animal husbandry, irrigation, PWD will be provided budgetary support or compensated with equal land value elsewhere, the government said.