The Telangana government on Friday reduced Value-Added Tax (VAT) on Air Turbine Fuel (ATF) from 16 per cent to 1 per cent.

Industry minister K.T. Rama Rao made the announcement at an event organised to mark completion of 10 years of the Rajiv Gandhi International Airport.

He said the decision would come into effect immediately, adding this would help increase air connectivity and attract more international carriers to Hyderabad.

Rama Rao, also the son of Chief Minister K. Chandrasekhar Rao, said the government had promised this to Civil Aviation Secretary R.N. Choubey at ‘Wings India 2018’ held here earlier this month.

Choubey stated at ‘Wings India’ that VAT on ATF was over 50 per cent of total operating cost of domestic carriers and this was 70 per cent higher than the global average.

Rama Rao said the development of India’s first Greenfield airport by GMR Group was the most remarkable and inspiring story.

He said the most modern airport was the shining example of what Telangana and Hyderabad stand for. “Hyderabad airport is the brand ambassador of our ambition to position Hyderabad as the global city,” he said.

The Chief Minister also laid the foundation stone for an exhibition cum convention centre. Rama Rao said the convention centre with 12,000 capacity would be India’s largest facility and would be the destination for meetings, conventions and exhibitions.

The government also announced metro rail to further boost the connectivity to the airport, located about 30 km from the city.

Rama Rao said ‘Hyderabad Metro Airport Express’ was estimated to cost Rs 4,650 crore.