Thiruvananthapuram: The opposition on Monday wanted to know why the government had limited the one per cent sales tax relief on aviation turbine fuel to just the Kannur airport, and had not implemented its own cabinet decision of slashing the sales tax on aviation turbine fuel by 5 per cent at all airports in the state.
Chief Minister Pinarayi Vijayan refused to respond to the specific poser. He simply stated that the one per cent VAT relief was to encourage operations at the greenfield Kannur airport. In protest, the opposition staged a walkout.
The issue was raised in an adjournment motion moved by Muslim League leader M K Muneer in the assembly on Monday. “In 2017, the Tax Department, overruling the objections of the Finance Department, had suggested a one per cent reduction in the tax on aviation fuel. But the cabinet instead decided to bring it down by 5 per cent. This was before the Kannur airport came into being,” Muneer said.
“The cabinet decision was taken on September 27, 2017, and a notification too was issued on the basis of this cabinet order. But the decision has still not been implemented, and the tax on aviation fuel in the state remains at 29 percent,” Muneer said.
It is in such a situation that the government had gone ahead and given a one per cent relief for flights landing in Kannur alone. “The interest shown to Kannur is understandable. But this excessive interest in Kannur does not behove of a chief minister. You are not the chief minister of Kannur, you are the chief minister of the entire state,” Muneer said.
The chief minister seemed offended by the remark. “They say that I am taking an excessive interest in Kannur. I am excessively interested in developing Kannur. We are also looking at developing a new airport in Pathanamthitta,” he said in reply.
Though Pinarayi did not touch upon the 2017 cabinet decision, he said that the one per cent relief was given to Kannur as part of the regional connectivity scheme under the Union government’s Ude Desh ka Aam Naagrik (UDAN). The chief minister said that the airports at Thirvananthapuram, Kochi, and Kozhikode were not eligible for similar concessions.
“The Kannur airport, being a greenfield one, had to incur heavy expense for its day-to-day functioning. It was as an encouragement that the relief was given. Also, the sales tax on ATF was reduced to 1 per cent for 10 years as part of Kannur joining UDAN,” he added.
Opposition leader Ramesh Chennithala said that the chief minister need not create a smokescreen citing UDAN. “The UDAN scheme is nothing but an attempt to encourage people to take more domestic flights,” he said. “Such encouragement for more domestic flights could be done for Thiruvananthapuram, Kochi and Kozhikode airports,” he said.
If promoting domestic flights was the intention, Muneer had earlier said that the Karipur airport in Kozhikode needed a bigger boost. “Three domestic flights from Karipur - to Hyderabad, Chennai and Bangalore, have been cancelled,” he said.
The opposition leader further said that a reduction in fuel tax would attract more flights to the state, and thereby improve its tax revenue. “There are over 300 aircraft that fly over the Kerala skies a day. These flights could be compelled to touch down to any of our airports if the tax was reduced. Now they fly to Sri Lanka and other places to fill up,” Chennithala said.
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