Bihar Cuts VAT on Aviation Fuel to Boost Air Travel and Tourism

Patna, Jun 3 (PTI): In a significant move to boost air travel and tourism, the Bihar Cabinet has authorized a substantial decrease in value-added tax (VAT) on aviation turbine fuel (ATF) from an existing rate of 29 percent to a mere 4 percent. This decision was taken during a state Cabinet meeting led by Chief Minister Nitish Kumar, responding to a proposal from the Commercial Tax department intended to encourage more commercial flights to operate within Bihar.

Deputy Chief Minister Samrat Choudhary, in an official statement post-cabinet meeting, informed that this VAT reduction aligns with the Regional Connectivity Scheme (RCS). He stated, "The Cabinet's decision to reduce VAT on ATF from 29 percent to 4 percent is anticipated to lead to a drop in air ticket prices, increasing flight operations within the state, thereby enhancing state revenue and creating employment opportunities."

Previously, Gaya airport alone benefited from a 4 percent VAT on ATF. Choudhary, who also handles the Finance portfolio, highlighted that the lower rate will now extend to all airports across Bihar.

The initiative also aims to promote tourism in the state. Known for its numerous tourist attractions, Bihar welcomes myriad travelers globally. This decision arises from a Central government request, as the Ministry of Civil Aviation encouraged lowering VAT on ATF to 4 percent," added the Deputy Chief Minister.

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