Maharashtra govt cuts VAT on aviation jet fuel, gives carriers relief

New rate will be applicable in Mumbai, Pune and Raigad districts, says state budget

The Maharashtra government on Thursday announced reducing the value added tax levied on aviation turbine fuel (ATF) to 18 per cent from 25 per cent, giving relief to domestic carriers.

The new rate will be applicable in Mumbai, Pune and Raigad districts, deputy chief minister Devendra Fadnavis announced in his budget speech. Maharashtra levies 4 per cent VAT on ATF in districts except Mumbai and Pune.

Mumbai is India’s second busiest airport with 315 domestic departures daily. Pune ranks among the top ten busiest domestic airports. Raigad doesn’t have a functional airport but the upcoming Navi Mumbai airport is in the district.

The new rate could help in reducing fuel expenses for airlines as they rework their fueling uplift plans but it is not expected to add to many new flights as both Mumbai and Pune airports are constrained for slots.

“In a scenario of high fuel prices, this step will prove to be a catalyst in our efforts to ramp up air connectivity. Maharashtra joins 19 states/union territories that have rationalised VAT in the last one and half years. Alongside enhanced connectivity for Mumbai, Pune and Raigad this will also make travel more affordable and boost growth,”  said civil aviation minister Jyotiraditya Scindia on Twitter.