New Delhi: The Delhi government announced a reduction in Value Added Tax (VAT) on aviation turbine fuel (ATF) from 25 per cent to 7 per cent on Saturday. The decision comes after a similar move by the Maharashtra government amid rising global jet fuel prices linked to the ongoing West Asia conflict.
The announcement was made by Chief Minister Rekha Gupta after a Delhi Cabinet meeting. The government said the tax cut would benefit passengers as well as airline companies operating from the national capital, reported India Today.
Fuel is one of the largest expenses for Indian airlines, accounting for 35–40 per cent of total expenditure. The reduction in VAT comes at a time when carriers are facing pressure from higher aviation fuel prices, airspace restrictions, and longer flying routes due to tensions in the Middle East.
The measures taken by the Maharashtra and Delhi governments are expected to lower refuelling costs at Mumbai and Delhi airports. Airports in Pune and Nagpur are also expected to benefit from the move.
Reportedly, the governments reduced the VAT following recommendations from the Ministry of Civil Aviation to lower VAT on jet fuel, as these states imposed some of the highest taxes on ATF in the country.
