Delhi govt slashes VAT on jet fuel to 1% from 25%

Our Bureaus New Delhi/Mumbai | Updated on January 13, 2018 Published on March 08, 2017


The Delhi government’s Budget proposal to slash VAT on aviation turbine fuel to 1 per cent from 25 per cent for flights headed from the Capital to ‘regional’ airports has been welcomed by domestic airlines and the logistics industry.

The State government’s proposal will aid the Centre’s Regional Connectivity Scheme (RCS), which seeks to connect big cities to smaller, ‘regional’ airports.

Terming the decision a “welcome move”, SpiceJet CMD Ajay Singh said the move will help reduce costs, which in turn would help bring down fares to smaller airports.

“We support all initiatives that help reduce fares for our customers,” Singh said.

While welcoming the move, IndiGo Airlines President Aditya Ghosh urged that the tax-break be broadened to all air travel out of Delhi. “It will allow IndiGo to provide even more affordable air travel to millions of our customers out of Delhi, which is our biggest base of airplanes,” he said .

Calling it both consumer and business-friendly, Areef Patel, Vice-Chairman of Patel Integrated Logistics Ltd, said the move would rationalise costs in the logistics sector and also improve its competencies and economics.

“It is likely to boost last-mile air delivery capabilities, especially to the North-East, which remains vastly under-penetrated... The price reduction is likely to result in a mass outreach of players to regions whose market potential is vastly untapped,” he said.

Published on March 08, 2017

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