Bihar slashes VAT on aviation turbine fuel to 4% to boost air connectivity

The Bihar Cabinet on Tuesday approved the proposal for reduction of value-added tax (VAT) on aviation turbine fuel ( ATF) from 29 per cent to 4 per cent.

The state Cabinet meeting, chaired by Chief Minister Nitish Kumar, approved the proposal of the Commercial Tax department to reduce VAT on ATF to attract more commercial flights.

Bihar DyCM Samrat Choudhary in a statement issued after the cabinet meeting said, "The Cabinet approved the reduction of VAT on ATF from 29 per cent to 4 per cent under the Regional Connectivity Scheme (RCS). With this decision of the government, the air ticket prices will further reduce and it will also attract more commercial fights in the state....it will further enhance state's revenue and will also generate employment.".

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Earlier, 4 per cent VAT on ATF was applicable at Gaya airport only, Choudhary who also holds the Finance portfolio said, adding now the reduced rate will be applicable at all airports in the state.

"This was also done with the objective of promoting tourism in the state. Bihar is home to many tourist destinations and is visited by a large number of tourists from all over the world. The decision has been taken following the request of the Central government. The Ministry of Civil Aviation had requested the state government to reduce VAT to 4 per cent on ATF," said the DyCM.