Bring Down VAT On ATF To 5% To Enhance And Increase Air Traffic: PHD Chamber

PHD Chamber - GMR Aviation Summit 2015 recommended drastic VAT cuts on ATF from average rate of 22% to less than 5%, arguing that states that have so done, seen immediate connectivity and traffic impact of this incentive.

The white paper released on 'Developing Regional & Remote Connectivity' by senior government functionaries and industry representatives under aegis of PHD Chamber of Commerce and Industry, demanded that lowering ATF taxes would fuel connectivity to regional air and cargo hubs and increase their traffic drastically.

The white paper, however, adds that with a reduction of VAT on ATF from 20% to 4%, Chhattisgarh has seen almost 100% increased in air connectivity.

West Bengal's incentive has led to Spice Jet starting an international connection from Bagdogra to Kathmandu; this airport has clocked a 64% y-o-y rise in passenger traffic in April-May FY15 as the number of flights has grown by 37% compared to previous year.

Likewise, the connectivity and the air traffic was also increased substantially in states such as Goa, MP and Jharkhand as these respectively curtailed VAT on ATF from 22%, 23%, and 20% to 12.5%, 5% and 4%.

Therefore, the other states should follow the suit for which the central government can undertake persuasive initiatives and efforts, said the Vice President of PHD Chamber Mr. Gopal Jiwarajka.

Speaking on the occasion, Ambassador of Turkey to India Dr. Burak Akcapar offered the Turkey's expertise on Civil Aviation to India in any respect to help become its 'Make in India' partner emphasizing that whatever Turkey is producing, it can so do in India with her Indian counterparts.

Joint Secretary Ministry of Civil Aviation Mr. Balwinder Singh Bhullar in his remarks said that the government would consider the proposals of the industry for the growth of civil aviation sector as and when their time comes.

Secretary, Airports Economic Regulatory Authority of India Mr. Alok Shekhar also hinted that several initiatives are on the cards for enhancing the air connectivity with smaller towns and hinterlands.

Chairman Civil Aviation Committee, PHD Chamber Mr. K Narayana Rao said, PHD Chamber feels to make the important aspect of regional and remote air connectivity, all the stakeholders in the sector such as centre and state governments, airports, regional airlines should work together with great coordination so that this sector is taken to the desired heights.

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