VAT cut on fuel big boost for domestic flights from Trichy

TRICHY: The state government’s announcement slashing value added tax (VAT) on aviation turbine fuel (ATF) drastically from the existing 29% to 1% for some flights based in tier II cities has brought much relief to domestic service providers operating from Trichy. The city airport being one of the beneficiaries, it would help curtail fuel cost and operational expenses.
The decision is expected to encourage many service providers to operate domestic flights from Trichy, Airports Authority of India sources here said.

The government had stated in the notification that VAT reduction would be applicable to airports where the passenger traffic is not more than 50 lakh a year.

The concession shall be for domestic flights of scheduled airlines arriving after 11 pm and departing before 7 am and parking for at least 3 hours.

As of now, Jet Airways, Alliance Air and IndiGo have been operating 12 services a day to Mumbai, Delhi, Bangalore, Kochi and Chennai.

The announcement will enable the aircraft to halt at the airport at night. The slash in VAT from 29 % would also reflect on the fares.

“Reduction in VAT will benefit passengers who arrive late in the night and those who opt for an early departure”, said G Radhakrishnan, a businessman from Karur.

He said there were lots of possibilities for the operators to cut down fares and provide more facilities.

Daily engineering maintenance with necessary stores would be an added facility for operators who halt their flights at Trichy airport, a senior AAI official said.

As of now, three operators were providing services to Chennai, Bangalore, Kochi, Mumbai and Delhi.

“The decision will encourage more operators to connect Trichy as their destination since they can halt their flights during nights if they wish. Trichy airport also has seven bays for halting the flights,” airport director K Gunasekaran said.

Former civil aviation minister Ashok Gajapathi Raju had pointed out during a visit to Trichy the vital role played by ATF in the overall operational expenses incurred by airlines.

Due to the exorbitant VAT charged by the state governments, no airlines had been coming forward to operate domestic services.

Source