The Uttar Pradesh government has cut VAT on aviation turbine fuel (ATF) to make Jewar Airport a competitive aviation hub. Uttar Pradesh Chief Minister Yogi Adityanath’s recent decision to reduce the VAT on aviation fuel to just 1% is seen as a move to position Noida’s Jewar Airport as a competitive player. This airport is expected to become operational in 2025.
In sharp contrast to Delhi’s Indira Gandhi International (IGI) Airport, which imposes a VAT rate of 25% on aviation fuel, the new low tax rate at Jewar Airport is expected to benefit airlines by reducing operational costs. This reduction in fuel costs could result in more affordable airfares for passengers.
News18 reported that the tax cut could be a significant factor in driving down overall costs of operation for carriers. As fuel expenses are a major component of airline operations, lower fuel prices could lead to reduced ticket prices, benefiting travellers. This is crucial for the Jewar Airport, which will look to meet national and international aviation standards.
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In the coming months, the Airports Economic Regulatory Authority of India (AERA) will begin discussions on the fare structure for the new airport, which will help define its competitive edge in the region, News18 reported. The AERA is expected to issue guidelines that will further establish the airport’s pricing and operational policies.
Once operational, Jewar Airport will become the largest in northern India, offering a vital alternative to the increasingly congested IGI Airport. The new airport will help ease growing passenger demand in the Delhi-NCR region, offering more flight options at competitive prices. This move is expected to reduce pressure on IGI and provide a more efficient and affordable travel experience to visitors.
Source: CNBC TV18
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