Aviation fuel tax to remain at previous 20 %
Jammu and Kashmir Government Thursday announced rollback of VAT hike proposed in the Budget on readymade garments, hosiery and cell phones. It also announced that tax on Aviation Turbine Fuel (ATF) for helicopters engaged in tourism and pilgrimage will be kept at previous 20 percent.
The rollback was announced by Finance Minister DrHaseebDrabu while winding up Budget discussions in the House. The VAT on these items will remain at previous 5 percent, he said.
In the Budget, the Government had proposed to enhance VAT on these items from five percent to 14.5 percent.
He also said that tax on ATF will remain at previous 20 percent. “The tax on ATF was reduced last year from the national average of 25 percent to 20 percent. We had hoped it will have a positive impact on tourism because of cheaper fuel. But it didn’t happen. However, given the demands of the members of this House, I am rolling back the proposal of 25 percent tax on ATF in case of helicopters. The tax on fuel for helicopters engaged in tourism will be the previous 20 percent,” he said.
The Government’s move to enhance ATF had come under sharp criticism from different quarters who had argued that it will hit Kashmir’s tourism sector.
On Monday, former Chief Minister and National Conference president Dr. Farooq Abdullah had said the government’s decision would hit tourism as airfares would become costlier due to additional taxation of five percent being imposed by the state government.