Aviation Minister Jyotiraditya Scindia urges states, UTs to rationalise VAT on jet fuel within 1-4% range

The price of ATF is a major component of the operating cost of airlines with that, the tax on ATF contributes significantly to the ATF price. 

New Delhi: Union Minister for Civil Aviation Jyotiraditya Scindia on Wednesday wrote a letter to 22 states and union territories urging them to rationalize VAT on Aviation Turbine Fuel (ATF) across all airports in States within the range of 1 per cent to 4 per cent, in a bid to give impetus to air travel. As per an official statement from the Ministry of Civil Aviation, he has asked them to take forward common intention to boost air travel and connectivity in State with a view to accelerate its economic development. The price of ATF is a major component of the operating cost of airlines with that, the tax on ATF contributes significantly to the ATF price. Addressing this issue would enable a force multiplier effect with regard to air connectivity in states.  Citing examples of progressive states such as Kerala, Andhra Pradesh, Meghalaya, Nagaland, Sikkim and Telangana, the Minister wrote that they have brought down the VAT to one per cent and even below. As a result, they have seen a substantial jump in the number of aircraft movements in their states. For example, the Government of Kerala has brought down VAT on ATF from 25 per cent to 1 per cent.