The Tripura government has decided to reduce Value Added Tax (VAT) on aviation turbine fuel to attract airline operators to function from Maharaja Bir Bikram Kishore Manikya Airport here, a minister said Monday.
Law Minister Ratan Lal Nath told reporters that a decision had been taken to reduce VAT from 18 per cent to 16 per cent, as a result of which aviation fuel would cost significantly lesser in Tripura compared to Gopinath Bordoloi International Airport in neighbouring Guwahati or Netaji Subhash Chandra Bose International Airport in Kolkata.
Tripura's state exchequer would take a hit of Rs 1.2 crore annually following the decision, Nath said.
VAT on aviation fuel is charged at 23.65 per cent at Guwahati Airport and 25 per cent in Kolkata.
This move is expected to incentivise airlines to buy fuel from Tripura which can ultimately benefit passengers in terms of ticket price.
"Tripura used to charge aviation fuel at 18 per cent and the new decision would bring it down to 16 per cent, which in terms of money, would make the fuel cost lower at Agartala than its nearest two major airports Guwahati and Kolkata," Nath said.
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SpiceJet withdrew its operations from Agartala recently, which prompted Chief Minister Biplab Kumar Deb to seek Union Civil Aviation Minister Suresh Prabhu's intervention to prevent, what he termed, monopolistic situation for IndiGo Airlines, resulting in a sharp increase in airline ticket prices.
"With the aviation turbine fuel cost lowered, we hope that airline operators will be more interested to operate from Agartala and passengers would get affordable tickets," Nath said.
At present, eight IndiGo flights and three aircraft of Air India fly out of Maharaja Bir Bikram Kishore Manikya Airport everyday.
Of the three Air India flights, one aircraft is reserved for Army and para-military forces.