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Thursday, 07 February, 2019, 15 : 00 PM [IST]

Kerala reduces ATF tax from 28% to 5% for domestic carriers

Kerala government has decided to reduce the Aviation Turbine Fuel (ATF) tax from the current 28.75% to 5%. This reduction will be available only to domestic carriers flying to 4 international airports of Kochi, Trivandrum, Kozhikode and Kannur. 

Kerala was one of the states where ATF tax was the highest in the country. The decision was announced by Dr Thomas Issac, Finance Minister, Kerala while responding to the Budget discussions in the State assembly.

There was a lot of hue and cry from the opposition parties in the state against giving unilateral ATF tax reduction for the newly opened Kannur International Airport by the government.The decision to expand the concession to other airports in the state by the government is seen as a step to mollify opposition as well.

As per the State Finance Minister, the state is expecting a revenue loss of approximately INR 100 crore from this decision. However, the government feels that it will be able to manage the revenue loss with more sales from carriers opting Kerala for refilling.

Issac also announced the postponing of decision to levy 1% additional flood cess for products and services fall in the higher brackets of 12, 18 and 28% GST from April 1 to a later date.

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