AGARTALA, November 21 (TIWN): Tripura Govt. today on its cabinet meeting slashes Aviation Turbine Fuel (ATF) Value Added Tax (VAT) by 4 percent

Talking to the media persons on Friday after the cabinet meeting, Finance Minister Bhanulal Saha said that on its cabinet meeting today the state govt. fixed the ATF VAT to 18 percent by slashing the VAT by 4 percent from the current 22 percent. Minister Bhanulal Saha further added that the decision of reducing the VAT is expected to reduce the financial burden of airlines as ATF is one of the major cost components for carriers comprising about 45 per cent of the total airline’s cost.

The tax rate ranges from 4 per-40 per cent in some states. The Telangana has plans to bring down the VAT on ATF to about 4 per cent.

The Tripura govt. today made a drive on reducing the ATF VAT acting on the notification of the Union Ministry of Civil Aviation to the state to reduce the VAT on ATF.

Currently, Gujarat, Orissa, Madhya Pradesh, Chhattisgarh and West Bengal levy 4-5 per cent sales tax on ATF followed by Goa, which last year reduced the tax slab from 22-12.5 per cent.

With Indian Airlines posting a combined loss of about Rs. 10,000 crore in 2012-13, and a total debt of almost Rs. 90,000 crore, the union ministry of civil aviation asked some of the state to slash VAT on jet fuel and ease a major burden on the industry.