Bengaluru, Feb 16 : Karnataka on Friday proposed to reduce sales tax on aviation turbine fuel (ATF) by 23 per cent -- to 5 per cent from 28 -- to promote regional air connectivity and feeder service across the southern state.
"I propose to reduce sales tax on ATF used in small aircraft by civil airlines for providing connectivity to remote and un-connected places across the state and country," said Chief Minister Siddaramaiah while presenting the state budget for fiscal 2018-19 here.
The drastic tax cut on the ATF is expected to lower air fares on the feeder routes within the state and the region around.
"Cheaper ATF on lower tax will enable the airlines to support the Udan scheme of the Union Government, aimed at developing regional connectivity and making air travel affordable for the common man," Siddaramaiah told lawmakers in the state assembly in his 90-minute budget speech, delivered in Kannada.
