New Delhi: Days after central excise duty cut in petrol and diesel, the government on Wednesday reduced the excise duty on aviation fuel to 11 per cent from 14 per cent in order to provide relief to airlines from high fuel costs.
The Central Government “on being satisfied that it is necessary in the public interest” took the decision to reduce the excise duty on aviation turbine fuel (ATF) to 11 per cent, a notification by the Revenue Department of Ministry of Finance said. “This notification shall come into force with effect from the 11th day of October, 2018,” it said. The move will provide relief to airlines who are facing high fuel costs and falling rupee. It assumes significance as ATF costs constitute 35-40 per cent of the total operating cost of an airline in India.
The government on September 26 had raised import duty on ATF to five per cent from zero per cent, along with duty hikes in 18 other items, to cut current account deficit. The excise duty on ATF was raised to 14 per cent from 8 per cent in March 2014 when Brent crude oil prices had fallen to $36 a barrel. However, with oil prices hovering above $83 a barrel, several airlines posted losses in the first quarter this fiscal.