Bhubaneswar: The Odisha Cabinet today approved a proposal to reduce value added tax (VAT) to 1% on sale of Aviation Turbine Fuel (ATF) to Regional Connectivity Scheme (RCS) fixed-wing flights/helicopters/seaplanes at any airport/heliport/helipad/ water aerodrome located with the State pf Odisha.
This proposal shall supersede the earlier notification of the Finance Department and will be co-terminus with the validity of the earlier notification i.e. 21st of August 2027, said an official press release.
Earlier, to encourage the airlines to use RCS Airports, the 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 from 22nd of August 2017 which is valid till 21st August 2027.
Presently, Jharsuguda, Rourkela, Jeypore, Utkela are recognized 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 (BPIA), Bhubaneswar. However, being a Non-RCS Airport, reduced VAT of 1% on ATF was not applicable at the BPIA 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 BPIA.
This will enhance regional air connectivity in the State, attract investment of airlines, generate employment and also reduce cost of travel.
