In a landmark move to enhance air connectivity and reduce the financial burden on passengers, the Bihar government has announced a dramatic 25% cut in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF). This reform, approved during a recent cabinet meeting, reduces the VAT rate from 29% to a mere 4%, aligning Bihar with aviation-friendly states like Uttar Pradesh, Gujarat, Delhi, and Maharashtra.
Chief Secretary Dr. S. Siddharth shared details of the decision, stating that the initiative is expected to stimulate the aviation sector in the state by encouraging airlines to operate more flights from Bihar airports. With this measure, the state hopes to shed its reputation as a high-cost fuel zone that previously discouraged airlines from refueling in Bihar.
Airlines Set to Benefit; Common Passengers May See Airfare Slashed by up to ₹1100
One of the most immediate impacts of this decision will be a potential reduction in airfares. Aviation analysts predict that tickets could become cheaper by ₹500 to ₹1100, making air travel more accessible to the general public. This is particularly significant for frequent flyers between Patna and metropolitan hubs like Delhi, Mumbai, and Kolkata.
Until now, the high VAT on ATF had been a major deterrent for airlines, leading many to refuel in neighboring states with lower tax rates. By slashing VAT, Bihar has signaled its intent to make air operations more cost-effective and competitive within its borders.
Strategic Move to Expand Air Services Beyond Patna; Regional Growth on the Horizon
Beyond Patna, the government aims to leverage this tax cut to develop air services in other emerging cities such as Gaya, Darbhanga, and Purnia. Lower operational costs may encourage airlines to consider new routes, thus boosting intra-state and inter-state connectivity.
Experts believe the move will not only bring more flights and cheaper tickets but also act as a catalyst for regional economic development. Better connectivity means improved access to business, healthcare, tourism, and employment opportunities for millions of residents in tier-2 and tier-3 towns.
Bihar’s Bold Reform Aligns with National Aviation Goals
With this strategic VAT reduction, Bihar joins a growing list of Indian states taking proactive steps to support the central government’s UDAN (Ude Desh ka Aam Nagrik) scheme, which aims to make air travel affordable and widespread.
