Aviation News: Govt Cuts ATF VAT to 7%, Civil Aviation Minister Welcomes Move
Aviation News
The Delhi government has reduced the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 25 percent to 7 percent, a move welcomed by Union Civil Aviation Minister Ram Mohan Naidu. The decision is expected to provide major relief to airlines operating from the national capital and help keep air travel affordable for passengers.
Praising the move, the Civil Aviation Minister said the aviation sector is currently facing rising operational costs and pressure due to increasing global fuel prices. He added that proactive steps by state governments can help airlines maintain stable operations while reducing the financial burden on travelers. Since Delhi is one of India’s busiest aviation hubs, the tax reduction is expected to benefit both airlines and passengers significantly.
Delhi Chief Minister Rekha Gupta stated that the decision was taken to strengthen air connectivity, promote tourism, and support economic activities linked to the aviation sector. The reduced VAT rate will remain effective for an initial period of six months. Reports suggest that the Delhi government may face a revenue loss of nearly ₹985 crore due to this decision.
Industry experts believe the reduction in ATF tax can help airlines lower operational expenses, as fuel costs account for nearly 35 to 40 percent of total airline operating costs. Similar steps have already been taken by other states, and experts feel more governments may consider reducing aviation fuel taxes in the coming months.
The aviation industry has long demanded lower taxes on jet fuel and has also requested the government to bring ATF under the GST regime. Experts say such reforms could make air travel more affordable, improve airline profitability, and boost the overall growth of India’s aviation sector.
