Karnataka government reduces VAT on aviation turbine fuel to 18%

Karnataka government has reduced value added tax (VAT) on aviation turbine fuel to 18 per cent from existing 28 per cent.

The decision will bring relief to airlines and help airlines reduce their fuel expenses. While seven states have reduced VAT to under four per cent. Karnataka's move is significant as Bangalore airport is the third busiest in the country and main operating base for airlines.

In August, civil aviation minister Jyotiraditya Scindia had written to 22 state governments urging them to reduce VAT on jet fuel from 1-4 per cent to give impetus to the aviation sector.

"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," the ministry had said.