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 4 percent at Bhopal and Indore airports, a move it hopes will bring down airfares, an official said on Wednesday. Currently, VAT on ATF was 25 percent at Bhopal and Indore airports, and with the decision to slash it taken by the state cabinet on Tuesday, it will come down to 4 percent, the official from the public relations department said.

"Like Gwalior, Jabalpur and Khajuraho airports where VAT on ATF is 4 percent, the state government has decided to rationalise it at Bhopal and Indore airports too by reducing it from 25 percent to 4 percent, 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.

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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 4 percent 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 1 percent to 4 percent, resulting in more flights from those states. There are different slabs of VAT applicable in Madhya Pradesh ranging from 4 percent to 25 percent. Scindia had requested the Madhya Pradesh government to reduce it to 1 percent to 4 percent uniformly for the entire state.

First Published:Nov 17, 2021 2:36 PM IST