Twenty states sign memorandum with Aviation Ministry to cut ATF tax to 1%: Sources

After Delhi and Goa, another twenty states are likely to cut aviation turbine fuel (ATF) tax to 1 percent. The states have signed a memorandum with the Aviation Ministry for the same, according to sources.

Earlier this month, Delhi and Goa cut ATF tax to one percent under the regional connectivity scheme (RCS) to boost regional travel.

Five other states – Arunachal Pradesh, Haryana, Tripura, Mizoram and Nagaland – have given consent for the ATF tax cut. Andaman and Nicobar Islands, too, have agreed to take a cut.

RCS, introduced in October 2016, is to boost regional connectivity and is applicable on routes between 200 to 800 km with no lower limit for remote, sensitive or hilly regions,

Under the scheme, states will have to cut ATF tax to one percent while the central government will provide concessions of about 2 percent on value added tax (VAT).

Aviation minister Jayant Sinha said the scheme will add 50 more airports to the current number of 75 in next six months.