Reduction in VAT helped states operate at higher capacity: Centre
Jan 05, 2023
New Delhi [India], January 5 : The reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF), has apparently helped the states operate at higher capacity levels.
As per data shared by the Union Ministry of Petroleum and Natural Gas (MOP&NG), so far, 17 states have reduced VAT on ATF, while, 15 states have reduced the VAT to 1-5 per cent level.
Karnataka has brought VAT down from 28 to 18 per cent and Goa has reduced it from 18 to 8 per cent, the data further revealed.
Due to the impact of the reduction in VAT, the overall ATF of 14 states increased from 53,058 kilolitres per month to 64,122 kilolitres per month.
It indicates that the states, in fact, gained from the reduction in VAT as they were able to operate at higher capacity levels.
Further, because of more offtake of ATF by airlines operating from these states, the impact of revenue loss, may be minimal, even after a reduction in the VAT, the ministry said.
