As a major relief for airlines, the Uttar Pradesh (UP) government has reduced value added tax (VAT) on aviation turbine fuel (ATF) from 21% to 1%. The change went into effect on January 4, 2022. The state government’s goal was to promote tourism in the state.
It was expected that the reduction in fuel costs could result in more affordable airfares for passengers. This may impact the airline industry in progressive manner.The state cabinet approved the proposal to decrease the rate of value added tax (VAT) from 21 percent to one percent on Aviation Turbine Fuel (ATF) in Uttar Pradesh.
Drafting GST Replies Simplified for Professionals – Enroll Now
The civil aviation ministry has been actively seeking state governments to reduce VAT on aviation fuel. So far, 19 states and union territories have reduced the tax in their respective territories. ATF and natural gas fall outside the GST regime and are subject to state-level taxes. These taxes vary across states, which is a crucial factor to increase operational costs for industries such as airlines, reported CNBCTv18.com.
This massive reduction may not have any impact for the end consumer as the decision to reduce fares will rest with the airlines. The government aimed at encouraging tourism in the state.
Drafting GST Replies Simplified for Professionals – Enroll Now
The state cabinet also approved a proposal to declare the state irrigation department’s minor canals on three places as not useful and allow construction of roads of the public works department. Along with this other initiatives to solar power plants were made. The government approved the proposal for Uttar Pradesh Power Transmission Corporation to carry out the engineering, procurement and construction (EPC) model for funding and carrying out works under green energy corridor-II for setting up of 4000 MW solar power generation plants.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
