PUDUCHERRY: Even as Puducherry continues to struggle to get itself on the aviation map, a higher rate of tax on Air Turbine Fuel (ATF) in Puducherry is posing as a stumbling block in attracting flight operators through the establishment of Aviation refuelling service station (ARSS) in Puducherry Airport.The ARSS was touted as a step to trigger operation of commercial flights from Puducherry airport by providing flight operators with the incentive of fuelling up their aircraft at a lower cost. The previous government under V Vaithilingam also revised the tax structure and brought down the VAT on ATF (sold to turbo-prop aircraft) to 1 per cent from 4 per cent to attract oil companies to set up the ARSS.However, after the revision of VAT on January 1, the tax on ATF (sold to turbo-prop aircraft) went up to 5 per cent. This puts ATF in Puducherry at higher rate as compared to Tamil Nadu where VAT on ATF is 4 per cent (sold to turbo-prop aircraft). This is posing a disadvantage for establishment of ARSS.The delegation from HPCL, which visited on February 15 and explored the setting up of the ARSS at Puducherry airport, felt that the airport had tremendous potential as it could not only serve Puducherry but also neighbouring regions of Cuddalore, Villupuram, Neyveli, Tindivanam as there was a lot of industrialisation and urbanisation taking place. However, only the operation of ATR type craft is possible from the airport due to the limitation of the current runway length. The VAT on ATF adds to this, making Puducherry less attractive for these category of smaller aircraft. Even the officials of tourism department were unaware of this upward revision of rates and presumed that the previous rate of 1 per cent VAT on ATF continued. The government needs to ponder on whether it should lower the 5 per cent VAT on ATF to make the proposition attractive.
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