Bhubaneswar: Odisha government has reduced VAT on ATF to 1% for flight operators flying in the State. The State cabinet headed by chief minister Naveen Patnaik on Monday has taken a decision to this effect.

In Aviation sector, the State has already made diverse contributions. Earlier, to encourage the airlines to use RCS Airports, State government had reduced the VAT on ATF to 1% under RCS-UDAN Scheme only at RCS Airports for RCS flights for a period of 10 Years vide Finance Department Notification No. 24567, Dt. 22.08.2017 which was valid till 21.08.2027,

Now, State Government have decided to reduce VAT to 1% on sale of ATF to RCS fixed-wing flights / Helicopters / Seaplanes at any Airport / Heliport / Helipad/ Water Aerodrome located within the State of Odisha. This proposal shall supersede earlier Notification of Finance Department and will be co-terminus with the validity of the earlier Notification (till 21.08.2027).

Presently, Jharsuguda, Rourkela, Jeypore, Utkela are recognised as RCS Airports in the State. The Oil Marketing Companies based out of these RCS locations, in the State are selling ATF to the RCS Aircrafts with reduced VAT i.e., 1%. All these Airports are primarily either connecting or being planned to connect to the Biju Patnaik International Airport, Bhubaneswar. However, being a Non-RCS Airport, reduced VAT of 1% on ATF was not applicable at the Biju Patnaik International Airport and other Non-RCS Airport.

With implementation of this proposal, Bhubaneswar as the State capital shall captivate the RCS airline operators to have their operational base at BPI Airport. This will enhance Regional air connectivity in the State, attract investment of Airlines, generate employment and also reduce cost of travel.