Scindia urges five states to lower VAT on Jet Fuel

Aviation Minister Jyotiraditya Scindia has once again called on five states to reduce the Value Added Tax (VAT) on aviation turbine fuel (ATF). While 19 states and union territories have already lowered the VAT rates following Scindia’s intervention, Bihar and Tamil Nadu still impose a high rate of 29%, Delhi and West Bengal at 25%, and Assam at 23.65%. Despite the Finance Ministry’s reluctance to lower excise on ATF, the only solution to rationalise jet fuel prices is through tax reductions at the state level.

Scindia has written to the five states, emphasising the benefits of lower tax rates, such as increased refueling and connectivity. Indian carriers have historically faced high operating costs due to elevated ATF prices, resulting in significant losses for most domestic airlines. To enhance the sector’s financial viability, Scindia has been urging the central government to reduce excise on ATF while encouraging states to lower VAT.

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