Odisha govt cuts VAT on ATF to boost regional air connectivity

Bhubaneswar: The Odisha government has decided to reduce VAT on ATF to 1 per cent for RCS fixed-wing flights/helicopters/seaplanes at any airport/heliport/helipad/water aerodrome located in the state.

A proposal in this regard got the Cabinet approval today.

Earlier, the state government had reduced VAT on ATF to 1 per cent under RCS-UDAN scheme only at Regional Connectivity Scheme (RCS) airports for RCS flights for 10 years in 2017.

At present, the state has three RCS airports at Jharsuguda, Rourkela and Utkela. The oil marketing companies (OMCs) located at these RCS airports are selling the ATF with the reduced VAT. However, the reduction in VAT was not applicable at the Biju Patnaik International Airport and other non-RCS airports, said an official.

With the implementation of the new proposal, the RCS airline operators will be encouraged to have their base at BPIA. This will enhance regional air connectivity in the state, attract investment in the sector, generate employment and reduce the travel cost, he added.