In a big move to boost air connectivity and tourism, the Bihar Cabinet, chaired by Chief Minister Nitish Kumar, has approved a significant reduction in value-added tax (VAT) on aviation turbine fuel (ATF) from 29% to just 4%. This revised rate, earlier applicable only at Gaya airport, will now be extended to all airports across the state.
The primary aim of this decision is to attract more commercial flights, reduce airfare, stimulate tourism, and create employment opportunities. The move is aligned with the Central Government’s Regional Connectivity Scheme (RCS), which focuses on making air travel affordable and accessible throughout the country.
Bihar, home to major historical and religious destinations like Bodh Gaya, Rajgir, and Nalanda, expects that cheaper ATF will incentivize airlines to expand operations in the state. The enhanced connectivity is projected to bring in both domestic and international tourists, thereby boosting the local economy.
Deputy Chief Minister Samrat Choudhary said that the multi-pronged benefits of the move:
“With this decision, air ticket prices will further reduce and it will also attract more commercial flights in the state. It will further enhance the state’s revenue and generate employment.”
The Ministry of Civil Aviation had earlier urged state governments to lower VAT on ATF to 4% to promote aviation growth and support the RCS.