The government has decided not to levy the Goods and Services Tax on disbursement of Viability Gap Funding extended to select airlines under the regional connectivity scheme,RCS .According to a notification from the Ministry of Civil Aviation, disbursement of the VGF or government subsidy will be exempt from the GST for a period of one year since the commencement of RCS operations to any of the 13 airports which have been connected since the scheme came into effect. Towards the VGF, the ministry is levying Rs. 5,000 per flight on key routes and proceeds from this route are estimated to be around Rs. 200 crore annually. So far, the ministry has garnered around Rs. 70 crore by way of levy for the VGF. VGF is a one-time grant provided to support infrastructure projects that are economically justified but fall short of financial viability.The RCS, also known as UDAN, Ude Desh ka Aam Nagrik with an objective is to make flying affordable for the masses with airfares capped at 2,500 rupees per hour of flight.