Government Notifies 2% Excise Duty for Aviation Fuel for Regional Connectivity Scheme (RCS)
THE primary objective of the Regional Connectivity Scheme (RCS) of the Ministry of Civil Aviation, is to facilitate / stimulate regional air connectivity by making it
affordable. As per the Scheme, an all-inclusive airfare not exceeding Rs.2,500 per RCS Seat will be applicable. Government has proposed several concessions like no landing and parking charges on RCS flights. Excise Duty at a rate of 2% shall be levied on Aviation Turbine Fuel (ATF) purchased by Selected Airline Operators from RCS Airports for an initial period of three (3) years from the date of notification of this Scheme.
Accordingly, Government has notified the concessional rate of 2% excise duty for Aviation Turbine Fuel drawn by operators or cargo operators from the Regional Connectivity Scheme (RCS) airports, till 25th day of August, 2019.
The Scheme proposes that Service Tax will be levied on 10% of the taxable value (abatement of 90%) of tickets for RCS Seats on an RCS Flight, without any input credit, for an initial period of 1 year from the date of notification of the Scheme by MoCA. Subsequently, this will be reviewed and notified accordingly. Service Tax will be payable by the passengers over and above the specified Airfare Cap.
CBEC is yet to notify the service tax concession.
Last week, Maharashtra became the first State to sign up for the Regional Connectivity Scheme.
Civil Aviation Minister Ashok Gajapathi Raju said the government will fast-track the development of airports at Shirdi, Nanded, Akola, Jalgaon, Solapur and Kolhapur to be readied for regional connectivity in the state.
Notification No. , Dated: August 26 2016