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AP plans to reduce VAT on aviation fuel, proposes 3 no frills airports
September, 09th 2014

The Andhra Pradesh Finance Minister Yanamala Ramakrishnudu today said that the Government is considering bringing down the VAT on aviation turbine fuel from the present 16 per cent to 1 per cent and has proposed three no frills airports in the State.

The revenue potential of aviation turbine fuel in the residuary State of Andhra Pradesh is about Rs. 27 crore per annum when 16 per cent VAT is levied. If the VAT is reduced on ATF as planned, the revenue loss is likely to be about Rs. 25.32 crore, he said in the State Assembly today.

In order to improve connectivity to Tier-2 and tier-3 cities, the State Government has initiated proposals to promote regional Greenfield airports.

As a part of the process to strengthen the infrastructure, the State Government has proposed to set up no-frills airports at Kuppam, Nellore and Srikkulam.

The Centre has been requested to direct AAI for extending necessary assistance for development of these no-frills airports, he said.

He said that the State Government has entered into memorandum of understating for upgradation of airports at Vijayawada, Rajahmundry and Kadapa with the Airports Authority of India. The AAI is taking up development of these airports.

The State Government has requested the Centre for upgradation of Visakhapatnam, Vijayawada and Tirupati airports to international standards as per the AP Regorganisation Act, 2014. The existing airport at Visakhaptnam is operated by the Indian Navy.

The AAI team has inspected four Government identified sites for development of Greenfield airports at Visakhaptnam during the first week of August.

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