2% Excise Duty on Jet Fuel on RCS Airports

IAS Prelims 2023

Government imposed excise duty of 2% for jet fuel purchased from airports that come under the regional connectivity scheme.

The concessional excise duty rate would be applicable for airlines as well as cargo operators.

Under the Regional Connectivity Scheme (RCS), various financial incentives would be extended to airlines that would fly to unserved and underserved areas.

A basic excise duty at concessional rate of 2 per cent would be levied on Aviation Turbine Fuel (ATF) drawn by operators or cargo operators from RCS airports for a period of three years.

The scheme would be for air services connecting “unserved and under-served routes” ranging from 200 to 800 kilometre, while there would be no lower limit for hilly, remote, island and security sensitive regions, as per the draft RCS which was unveiled in July.

Among others, Viability Gap Funding (VGF) would be extended to airlines participating in the regional connectivity scheme.