Trade body CTI urges Delhi CM to reduce VAT on aviation turbine fuel

The Chamber of Trade and Industry (CTI) on Monday wrote a letter to Delhi Chief Minister Rekha Gupta, urging a reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) to prevent a shift of air passengers to Noida's Jewar Airport.

CTI Chairman Brijesh Goyal said the high VAT on ATF in Delhi is making flight operations costlier, which could lead airlines to prefer Jewar Airport in Uttar Pradesh.

He said, "While Delhi levies a 25 per cent VAT on ATF, Uttar Pradesh reduced its tax from 21 per cent to just 1 per cent in December 2024."  CTI General Secretary Gurmeet Arora emphasised that the lower tax in UP will significantly reduce operational costs for airlines, potentially leading to lower airfares at Jewar Airport compared to Delhi's Indira Gandhi International Airport.

He said this price gap could result in a shift of air travellers to the new airport.

The CTI added that if VAT on ATF in Delhi is reduced, airlines will face pressure to lower ticket prices, benefiting passengers and ensuring that Delhi remains a preferred aviation hub.

The industry body urged the Delhi government to reconsider its tax policy on ATF to maintain competitive airfare rates and sustain air traffic at Indira Gandhi International Airport.