MP govt slashes VAT on ATF to 4%

Bhopal: In a bid to enhance air connectivity, the Madhya Pradesh government has decided to reduce the Value Added Tax (VAT) on aviation turbine fuel (ATF) to four per cent at Bhopal and Indore airports, a move it hopes will bring down airfares, an official said on Wednesday.

Currently, VAT on ATF was 25 per cent at Bhopal and Indore airports, and with the decision to slash it taken by the State cabinet on Tuesday, it will come down to four per cent, the official from the public relations department said.

"Like Gwalior, Jabalpur and Khajuraho airports where VAT on ATF is four per cent, the State government has decided to rationalise it at Bhopal and Indore airports too by reducing it from 25 per cent to four per cent," the official said.

This decision will give a boost to the tourism and hospitality sector in the State, apart from enhancing air connectivity, he said. The move will prompt the aviation companies to reduce airfares, introduce more flights from the state and provide relief to air passengers, the official said.

Union Civil Aviation Minister Jyotiraditya Scindia had earlier demanded that VAT on ATF in Madhya Pradesh be reduced to a uniform four per cent to attract more flights to his home State.

Scindia had also written to all the chief ministers on the issue, as there are about eight to nine States, where VAT on ATF is in the range of one per cent to four per cent, resulting in more flights from those States.

There are different slabs of VAT applicable in MP ranging from four per cent to 25 per cent.

Scindia had requested the MP government to reduce it to one per cent to four per cent uniformly for the entire State.