Dabolim (Goa), Dec 3 (IANS): Goa will slash VAT on aviation turbine fuel to 5 percent from the existing 12 percent, Chief Minister Manohar Parrikar said Tuesday.

He was speaking at a function at the Dabolim airport, 30 km from the capital, to mark the soft launch of a new integrated terminal building.

In a bid to convince union Civil Aviation Minister Ajit Singh, who was present on the occasion, that the state government was doing its best to encourage aviation companies to utilise the Dabolim airport, Parrikar said: "I assure you that the VAT on ATF will be reduced to five percent from 12 percent. Earlier it was 22 percent."

According to the chief minister, reduction in VAT on ATF would encourage airline companies to refuel in Goa and help improve the state's connectivity.

The new Dabolim terminus, which will be fully operational by January, will increase the airport's handling capacity from 3.5 million to 5.4 million people annually.