Odisha mulls VAT waiver on ATF for global carriers

The state government is toying with the idea of exempting value added tax (VAT) on aviation turbine fuel (ATF) for international carriers to operate their flights from the Biju Patnaik international airport here.

Though the airport got the international tag in October 2013, no international flight has taken off from it till date.

To attract commercial airlines to operate from the Biju Patnaik airport and to run commercial flights to other places in the state, the state cabinet had approved slashing of the VAT (value added tax) rate on aviation turbine fuel (ATF) and aviation gasoline to five per cent from 20 per cent.

Now, the state general administration (GA) department has proposed to waive off VAT on ATF completely to incentivise international flight operators. "The GA department has sent a proposal for VAT waiver on ATF for international operators. We are examining the modalities and implications of the proposal. No decision has been taken yet", said a top finance department official.

Air India has expressed its willingness to extend the services of its Bhubaneswar-Mumbai flight to Dubai. Besides, talks are on for extension of services of Bhubaneswar-Kolkata Indigo flight to Bangkok. "The airport authorities are in talks with Jet Airways to launch international operations from the Biju Patnaik international airport. ABC Airways has agreed to commence operations of its Fly Easy flights connecting Bhubaneswar and Bangalore from June", said Sharad Kumar, director, Airports Authority of India (AAI), Bhubaneswar. Dubai-based flydubai has proposed to operate a daily flight of Boeing 737-800 with 174 seats- 12 business class and 162 economy class seats. Both flydubai and Air Asia have submitted schedules to run commercial operations from Bhubaneswar. While flydubai will connect Bhubaneswar to Dubai, Air Asia has offered to run flights between Bhubaneswar and Kuala Lumpur.

Apart from flydubai and Air Asia, Air Arabia and SilkAir have also evinced interest to start commercial operations from Bhubaneswar.