Concession on VAT on ATF for Salem airport Requested
Airports Authority of India has constructed Salem airport suitable for operation of narrow body aircrafts like Boeing 737/Airbus 320. King fisher was operating 72 seater ATR aircrafts till august2011. Other Airlines have not commenced scheduled operations from Salem airport on economic considerations.
VAT on ATF (Aviation Turbine Fuel) is 5% for small aircrafts as against 29% for other aircrafts in
Tamilnadu (Copy-of Notification enclosed). This concession is granted to encourage air connectivity to small airports. In spite of this concession Salem airport has not achieved the desired air connectivity due to various reasons. One of the main reasons is that the destination requirement is Chennai, Mumbai, Delhi, Ahmedabad, Jaipur etc., Small ATR aircraft could take the passengers up to Chennai only and the passengers needed to change plane at Chennai. This discouraged passengers and they instead chose to move by road to Bangalore. Hence it is appropriate that the concession on VAT on ATF may be extended to other narrow body aircrafts as well for Salem airport so that airlines like GoAir, Indigo with large number of A320 aircrafts will find Salem airport attractive.
The concession given at present is aircraft specific, but to encourage regional connectivity, it is appropriate that airport specific concessions are also given so that the small Tier III airports like Salem become attractive. Similar concession has also been given by many state governments for e.g Raipur airport (Chhattisgarh), Amritsar, Maharashtra (other than Mumbai and Pune}, Shillong [Meghalava}, etc., It is seen that all } hence airports have gained increase in air traffic many fold. An extract of a report on the multiple benefits of such concession on Raipur airport is enclosed. Also Landed which is a very small town in Maharashtra has gained air connectivity to many destinations like Mumbai, Delhi, Aurangabad etc., only because of the concession on VAT on ATF by the Govt. Of Maha rashtra.
Salem airport has a potential to contribute to the economic and social development of the surrounding areas including Salem, Namakkal, Darmapuri, Krishnagiri Erode districts. The following examples are submitted
Salem being very close to Bangalore is capable of attracting investment in the field of BPO, KPO and other IT oriented activities. Salem and surrounding areas like Namakkal and Erode have emerged as educational hub of Tamilnadu with large number of reputed Schools, Colleges etc., It is seen that these Institutions are able to attract many students from even Chennai and other major cities in view of their discipline and the success rate. Also the colleges in the region have good reputation that they attract students even from foreign countries. These institutions have created awareness among the people and encouraged them to send their children for higher education. IT is one of the main field that can provide employment to large number of educated youth particularly girls. Conservative society in Salem and surrounding areas are shying away from sending their wards Particularly girls for jobs to other places like Bangalore and Chennai etc.,.
Development of air connectivity is the most important prerequisite for the development of IT industry which can provide huge employment to educated youth particularly Girls. Salem with high quality educated and cheap manpower and availability of low cost infrastructure like Land and building is already attracting IT investment in Salem. Concession on VAT on ATF will bring air connectivity to Salem and open the gates for the development of IT industry and Salem can become a viable alternative to Bangalore. Many air passengers were mentioning that time taken to reach Electronic City, Bangalore from Salem airport is same as the time taken from Bangalore airport due to heavy traffic congestion within Bangalore city.
Another important benefit of the concession would be the possibility of cargo movement from Salem airport. The farmers of the region produce Vegetables/ Flowers/Fruits (Mangos) etc., which have huge demand in metro cities and also for export. It is seen that the Jasmine and other flowers from the region are being transported by air from Bangalore airport for movement to Delhi, Mumbai and further for Export. Many trucks moving with huge quantities of flowers from Salem to Bangalore crossing the Salem airport stands testimony to this. Air connectivity with Narrow body aircrafts would allow cargo movement to metros and 'further export paving way for better price for the Farmers.
In addition to the above, the industrialists of the region have mentioned that the Salem city has lost many investment opportunities due to lack of air connectivity in spite of many advantages like cheap and skilled labour etc.,
Government of Tamilnadu in its Vision 2023 document has envisaged development of airports in Tamilnadu. Concession on VAT on ATF will revive the Salem airport immediately and contribute to the development objectives of Vision 2023 to make Tamilnadu numero uno State in India.
This single step of Concession on VAT on ATF for Salem airport would be a boon for the people of the region and wipe a curse that the fifth large city of Tamilnadu is without air connectivity.
In view of the above, it is requested that Concession/Exemption on VAT on ATF for Salem airport is granted on priority to enable regular scheduled operations to Salem airport and to benefit the
People in the region.
(Taken from recommendation sent to Tamil Nadu Government)