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Haryana has slashed the value added tax on aviation turbine fuel to 1 per cent, making it the fifth state to reduce the levy on the fuel.

In a series of tweets, Civil Aviation Minister Jyotiraditya Scindia on Sunday expressed his gratitude to Haryana Chief Minister Manohar Lal Khattar for the prompt action on reducing the VAT on jet fuel to 1 per cent and said the move will also set an example for other states to follow.

The Civil Aviation Minister also noted that the decision will boost air connectivity and economic development in Haryana. "With this, Haryana becomes the 8th State/UT to slash the tax rate after Andaman & Nicobar Islands, J&K, Ladakh, Himachal Pradesh, Uttarakhand, MP & Tripura," he said.

Scindia has been requesting states to reduce taxes on jet fuel, which accounts for a major chunk of the operational costs of an airline.

On November 18, the minister had said that seven states and Union Territories have slashed their VAT on ATF and that he was expecting more states to follow suit.

With the current tax structure on ATF, "you cannot have a robust civil aviation sector. I am very clear on that," he had said. 

Meanwhile last week, the Civil Aviation Minister had said that India has the potential to attain the top position in air travel in about a decade while also underlining the government's commitment to pushing the sunrise sector to scale new heights.

He had said the government is committed to improving connectivity on both regional and long haul international routes, and has set a target of raising the number of airports to 220 by 2025 from 136 at present.

"We have jumped from 74 airports in the last 70 years to 62 (more) airports in the last seven years. Now we have 136 airports. But that's not where we are going to stop. We have a target of a total of 220 airports by 2025, and that include heliport and water ports. The task before us is gigantic. Tomorrow we are going to launch the Jewar airport (near Noida).

"If you look at what we have been able to achieve in the last 5-6 years from 2014-2019....the connectivity growth, civil aviation alone has (grown) 89 per cent, and that helped us in jumping from the seventh position in terms of travel numbers to almost fourth position in 2019. And mind you, we will be jumping to the number one position in the next decade or so," the union minister told a virtual session of the Indian Chamber of Commerce (ICC).

It has resulted in a whole new market opening up for connectivity and travel, he said, adding much of the growth in the civil aviation sector now will be driven by tier 2 and tier 3 cities as tier-1 cities have reached their maturity.

 

 

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