Bhubaneswar, Nov. 22: Ministry of civil aviation secretary K.N. Shrivastava feels the state can attract more airline operators by reducing sales tax on aviation turbine fuel (ATF).

Shrivastava made a suggestion to this effect at a meeting with chief minister Naveen Patnaik on Wednesday. Naveen has assured him that he would look into the issue.

“With a high sales tax of 20 per cent on ATF, Odisha is compelling the airlines to spend more on their operation costs. For example, Raipur collects ATF sales tax at 4 per cent, and the small airport has become more active than the Biju Patnaik Airport in Bhubaneswar. The Odisha government should take a call on this,” Shrivastava told The Telegraph during a brief tour to the city yesterday.

Shrivastava met Naveen and chief secretary Bijay Kumar Patnaik and discussed the issue. “Both the chief minister and the chief secretary have promised to take positive steps in this direction,” the civil aviation secretary said.

“Bhubaneswar is an old state capital and Raipur came much after into the scene. Because of the radical step taken by the Chhattisgarh government (of reducing the ATF sales tax component from 20 to 4 per cent), the airport draws 38 operations (19 arrivals and 19 departures) a day,” he said.

The Bhubaneswar airport has 16 arrivals and 16 departures a day.

Aviation sources said apart from Chhattisgarh, even Andhra Pradesh has reduced its 33 per cent sales tax on aviation fuel to 4 per cent and this has increased air traffic to the state.

Oil companies supplying aviation fuel at the city airport said the ATF refuelling business there was worth Rs 210.24 crore and the state government made around Rs 42.04 crore per annum from tax. If the sales tax was reduced to 4 per cent, the state’s income will come down to around Rs 8.4 crore. However, the overall growth in tourism and allied sectors would be much more in that case.

Tour operators feel that with the airport getting ready to become an international one by the end of March next year, the ATF tax cut could make Bhubaneswar airport a preferred refuelling hub.

Shrivastava also added that Bhubaneswar with its potential as a preferred tourism destination, could use the opportunity to attract the carriers and the ATF sales tax cut could be a “useful strategy” for this.

The civil aviation secretary hinted at increasing the runway length of the city airport from 9,000 feet to 10,500 feet and for that, AAI officials have already requested the state government to allot 64 more acres of more land.

Replying to a question on suspicions that the under-construction domestic terminal would be privatised, Shrivastava said: “The new terminal will never be privatised and will remain under the control of the AAI.”