The new increase in the tax on aviation turbine fuel (ATF) from 4 to 16 per cent in Andhra Pradesh would fetch the state exchequer an extra Rs 120 crore a year. However, this might take away the benefit Hyderabad enjoyed because of its lower tax rates.
The new tax arrangement, which came into effect from February 1, will leave only Maharashtra (excluding Mumbai and Pune) and Rajasthan at 4 per cent.
In spite of the increase, the tax on ATF in the state is still amongst the lowly in the country. Whereas Delhi and Haryana charge 20 per cent tax each, Karnataka imposes 28 per cent, Mumbai and Pune 24 per cent, Tamil Nadu 29 per cent, Gujarat 30 per cent, while Bihar, Madhya Pradesh and Tamil Nadu charge 28 per cent tax each on ATF.
The standard tax on jet fuel is 26 per cent and annual turnover from its sale is around Rs 10,000 crore.
Former chief minister Y S Rajasekhara Reddy had in February 2008 summary the tax on ATF to 4 per cent, when the Hyderabad worldwide airport was launched, to make the city an aviation hub. Following this, many airlines complete Hyderabad their re-fuelling hub.
The state realized revenues in the range of Rs 37 crore-Rs 40 crore on explanation of this. Prior to February 2008, AP levied a 33 per cent tax and realised about Rs 300 crore per annum.
The new tax arrangement, which came into effect from February 1, will leave only Maharashtra (excluding Mumbai and Pune) and Rajasthan at 4 per cent.
In spite of the increase, the tax on ATF in the state is still amongst the lowly in the country. Whereas Delhi and Haryana charge 20 per cent tax each, Karnataka imposes 28 per cent, Mumbai and Pune 24 per cent, Tamil Nadu 29 per cent, Gujarat 30 per cent, while Bihar, Madhya Pradesh and Tamil Nadu charge 28 per cent tax each on ATF.
The standard tax on jet fuel is 26 per cent and annual turnover from its sale is around Rs 10,000 crore.
Former chief minister Y S Rajasekhara Reddy had in February 2008 summary the tax on ATF to 4 per cent, when the Hyderabad worldwide airport was launched, to make the city an aviation hub. Following this, many airlines complete Hyderabad their re-fuelling hub.
The state realized revenues in the range of Rs 37 crore-Rs 40 crore on explanation of this. Prior to February 2008, AP levied a 33 per cent tax and realised about Rs 300 crore per annum.
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