Odisha keen to reduce ATF sales tax to 5%

New terminus at Biju Patnaik airport inaugurated

To attract more private carriers for running flight operations to domestic and international destinations from the city airport, the Odisha government is keen to reduce value added tax (VAT) on aviation turbine fuel (ATF) to five per cent from 20 per cent presently.

"The state government is willing to reduce VAT on ATF to five per cent for the international flights touching Bhubaneswar and for all domestic flights from and to Bhubaneswar which touch at least one more airport located within the state," said chief minister Naveen Patnaik at the inaugural ceremony of the new domestic terminal. Urging the Odisha chief minister to take cognizance of the issue of reducing VAT rate on ATF, civil aviation minister Ajit Singh, said reduction of the rate to five per cent by the Chhattisgarh government has resulted in five fold rise increase in tax revenue due to the economic growth in alternative sectors such as travel, hospitality and tourism and 16 fold rise in passenger traffic handled at Raipur airport (15,000 passengers in 2002 to 8,02,000 in 2011).

On declaring the Biju Patnaik airport as an international airport, Singh said, "It will take two months for customs and other necessary facilities. Then we will start the process of making it an international airport and move the papers to Cabinet for approval."

For providing connectivity to tier-II and tier-III cities and far flung areas, the civil aviation ministry plans for 15 more airports under the Union government's greenfield airport policy. The airports would be developed with private sector participation. "As far as Odisha is concerned, Airports Authority of India (AAI) is all set to make an airport in Jharsuguda as soon as the state government gives the land," Singh stated. The swanky new terminal built at cost of Rs 145 crore can handle 800 incoming and outgoing passengers at a time.

Equipped with state-of-the-art facilities and amenities, the building spread over an area of 18,240 square metres, has in-line compatible baggage handling system, escalators, elevators, PA system, flight Information display system (FIDS) and CCTV for surveillance with the interiors depicting the state culture.

The new terminus is equipped to handle 30 million passengers a year. With the 9,000 ft runway, the airport can now handle nearly 20 flights per day and can accommodate long haul aircraft. The airport has nine parking bays for 320 class aircraft.