Bihar Slashes Aviation Fuel Tax to 4 Per Cent

05 Jun 2025 CW Team

In a major push to improve air connectivity and promote tourism, the Bihar Cabinet, led by Chief Minister Nitish Kumar, has approved a sharp reduction in value-added tax (VAT) on aviation turbine fuel (ATF) from 29 per cent to 4 per cent. Previously applicable only at Gaya airport, the revised rate will now extend to all airports in the state.

The move is designed to encourage airlines to operate more commercial flights in Bihar, reduce airfare, and align with the Central Government’s Regional Connectivity Scheme (RCS), which aims to make air travel more affordable and widespread.

Bihar, home to prominent heritage and religious sites like Bodh Gaya, Rajgir, and Nalanda, expects the fuel tax cut to incentivise domestic and international carriers to expand operations. Increased flight frequency is projected to boost tourist inflow, stimulate the local economy, and create job opportunities.

Deputy Chief Minister Samrat Choudhary highlighted the wide-ranging benefits, stating, “This decision will lower ticket prices, attract more commercial flights, enhance revenue, and generate employment across the state.”

The Ministry of Civil Aviation had earlier urged state governments to bring VAT on ATF down to 4 per cent in order to support the growth of regional air networks under the RCS framework.

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