The Delhi government on Saturday announced its decision to reduce the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF).According to the the chief minister’s office Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 25 per cent to 7 per cent, according to the chief minister’s office, as quoted by ANI, claiming it to be a move to to benefit airlines, passengers.“Delhi government has decided to reduce the value-added tax (VAT) on aviation turbine fuel (ATF) from the existing 25 per cent to 7 per cent, a move which is likely to benefit the airlines and common passengers,” the official statement said.This comes a day after Maharashtra reduced Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) to 7 per cent from 18 per cent for six months, effective May 15, to ease fuel costs for airlines amid high global crude prices and West Asia-related disruptions.ATF, which accounts for nearly 30–40 per cent of airline operating costs, has come under sustained price pressure due to geopolitical tensions, supply chain disruptions, and volatility in global crude oil markets, particularly amid Middle East conflicts and periodic airspace restrictions. The elevated fuel costs have significantly impacted airline balance sheets, forcing carriers to adjust fares, especially on high-demand domestic routes.The recent policy move is said to to provide some cost relief to airlines, improve operational viability, and help moderate ticket prices during peak summer travel demand. It is also likely to support route expansion and capacity planning by reducing variable input costs, thereby strengthening overall aviation connectivity and reinforcing India’s key airport hubs, including Mumbai and Delhi, in a highly competitive aviation environment.
Which state do you think made a better decision regarding ATF VAT reduction?
