AGARTALA: The council of ministers in Tripura at a meeting on Tuesday decided to collect only 1% VAT on aviation turbine fuel (ATF) with immediate effect, two weeks after slashing VAT on petrol and diesel by 7.5% and 6.5% respectively.
Tripura government spokesperson Sushanta Chowdhury on Wednesday said the cabinet decided to reduce 15% VAT on ATF, which is 16%. The decision will help bring in more airlines in the state in wake of the operations of newly built MBB international airport here, as ATF price is a major component of the operating cost of airlines.
The state government has discussed flights between Agartala and Dhaka and Chittagong with the Centre.
The state will incur an annual revenue loss of Rs 1.67 crore with the decision against the earning of Rs 1.78 crore per annum from ATF. The decision had brought Tripura to the list of the lowest ATF tax-collecting states in the country, Chowdhury claimed, adding that Tripura has been historically connected with West Bengal and Assam, which are still collecting 25% and 23.65% VAT on ATF respectively.
Tripura used to charge an 18% tax on ATF but after the BJP-led government came to power it was reduced by 2% and fixed it at 16%. However, with a new terminal building coming up in MBB airport soon, the Tripura government has taken several initiatives to bring more flights to Agartala and cutting down ATF tax is one of them, Chowdhury said.
When flights resumed after a long break due to Covid pandemic in August this year, civil aviation minister Jyotiraditya Scindia had urged 22 states and Union Territories to reduce VAT on ATF and bring it within the range of 1-4% across all airports in order to give an impetus to air travel.
