The government’s efforts have resulted in 31 states and Union Territories now levying lower taxes on jet fuel, a development that has provided a huge fillip to the airline industry, which was witnessing a V-shaped recovery after the Coronavirus pandemic, Union minister Jyotiraditya Scindia said on Saturday. Emphasising that the civil aviation sector provides huge economic multipliers, he also said that greater connectivity has led to greater economic development.

Air Turbine Fuel (ATF) accounts for around 40 per cent of the operational costs of an airline.

Scindia said that after taking over as the civil aviation minister, he reached out to various states and UTs to reduce the value-added tax (VAT) on jet fuel.

At that time, only 12 states and UTs were having 1-4 per cent VAT on the jet fuel, and the rest were charging 20-30 per cent, he said.

Today, Scindia said, 31 states and UTs are charging a VAT of 1-5 per cent on ATF, and that has provided a “huge fillip” to the airline industry.

The industry was witnessing a V-shaped recovery after the pandemic, he added. During the pandemic, the civil aviation sector was significantly impacted and flight services were suspended for a certain period of time. Post the pandemic, the sector has recovered well, and domestic air traffic is on an upward trajectory.

Greater connectivity has led to greater economic growth. For example, in Srinagar, the earnings have gone up by 25-30 per cent due to the lowering of the tax on ATF, the minister said.

Speaking at an event organised by the society Rambhau Mhalgi Prabodhini, Scindia said the whole of the government approach is followed by the ministry.

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