Agartala: Two weeks after slashing down VAT on petrol and diesel by 7.5 and 6.5 per cent respectively, the council of ministers in Tripura last night in a meeting decided to collect only one per cent VAT on Aviation Turbine Fuel (ATF) with immediate effect to attract aviation companies to increase their fleet in the state.
Tripura government spokesperson Sushanta Chowdhury said that the cabinet had a detailed discussion on the matter and finally decided to reduce 15 per cent VAT on ATF, which is 16 per cent now.
The decision would increase the number of aircraft in the state in wake of the operation of the newly built MBB international airport here, as ATF price is a major component of the operating cost of airlines.
The minister hoped that the decision of the state government would further enhance the convenience of the passengers as aviation companies would reduce the airfare in the Agartala sector, which has been connected with all metros and major cities of the country. The state government has been persuaded to connect Agartala with Dhaka and Chittagong by air.
The state will incur an annual revenue loss of Rs 1.67 Cr with the decision against the earning of Rs 1.78 Cr per annum from ATF. The decision had brought Tripura into the list of the lowest ATF tax-collecting states in the country, he claimed, adding that Tripura has been historically connected with West Bengal and Assam, which are still collecting 25 per cent and 23.65 per cent VAT on ATF respectively.
Tripura used to charge an 18 per cent tax on ATF but, after BJP led government came to power it was reduced by 2 per cent and fixed at 16 per cent. However, after a new terminal building comes up in MBB airport, which will be operational very soon, the Tripura government undertook several initiatives to bring more flights to Agartala and cut down ATF tax is one of them, Chowdhury stated.
After the resumption of flight operations in a long break due to the Covid pandemic in August this year, Civil Aviation Minister Jyotiraditya Scindia had urged 22 states and Union Territories to reduce VAT on ATF and bring it within the range of 1-4 per cent across all airports to give an impetus to air travel.
Chief Minister Biplab Kumar Deb last week in a video conference with Scindia has demanded the launch of direct flights with Dhaka and Chittagong of Bangladesh from MBB airport of Agartala to boost trade and tourism in the Northeast especially in Tripura. The union minister has appreciated the proposal of Deb and assured him to discuss the matter with Prime Minister; so that Tripura can get its presence on the aviation map of South Asia.