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Delhi Govt Slashes ATF VAT from 25% to 7% to Aid Airlines

The Delhi government has reduced VAT on aviation turbine fuel from 25% to 7% for six months. Chief Minister Rekha Gupta stated the move aims to help the struggling airline industry and boost tourism. The tax cut will result in a revenue loss of about Rs 985 crore for the Delhi government. This decision aligns with Prime Minister Narendra Modi's vision to keep the travel and tourism industries running smoothly.

Key Points: Delhi Cuts Aviation Fuel Tax to 7% for 6 Months

  • Delhi cuts ATF VAT from 25% to 7% for six months
  • Move aims to lower airline costs and boost tourism
  • Govt to lose Rs 985 crore in tax revenue
  • Follows PM Modi's vision for travel industry
2 min read

Delhi government reduces VAT on aviation turbine fuel from 25% to 7%

Delhi govt reduces VAT on aviation turbine fuel from 25% to 7% for six months, aiming to lower airline costs, boost tourism, and support PM Modi's vision.

"The government is fully committed to helping tourism, trade, and transport grow in the capital - Rekha Gupta"

New Delhi, May 16

The Delhi government on Saturday decided to reduce the Value Added Tax on Aviation Turbine Fuel from 25 per cent to 7 per cent, according to the Chief Minister's Office.

Chief Minister Rekha Gupta informed that this lower tax rate will last for six months for now.

As per the release, this decision was made to help the struggling airline industry, which is facing tough times due to global issues. Even though this move helps the industry, it means the Delhi government will lose about Rs 985 crore in tax revenue.

The Chief Minister explained that this step matches the Prime Minister's goal to improve travel and boost business. The main aims are to lower costs for airlines, boost tourism, help shipping businesses, and keep Delhi as a top travel hub.

She also mentioned that while most goods fell under the nationwide GST system in 2017, state governments still have the special right to tax six fuel products, which is why aeroplane fuel is taxed separately.

The Chief Minister said the government is fully committed to helping tourism, trade, and transport grow in the capital. She repeated that this tax cut will last for six months to follow Prime Minister Narendra Modi's vision of keeping the travel and tourism industries running smoothly.

Earlier, the Centre introduced several measures to cushion the impact. Under the leadership of Prime Minister Modi, the government has capped ATF prices for domestic scheduled operators, reduced airport charges, and extended support through the Emergency Credit Linkage scheme, Naidu said.

However, VAT on ATF, which is levied by state governments, remains a significant cost component and varies widely across states, often ranging from 4 per cent to 30 per cent.

The move is also expected to improve the competitiveness of Maharashtra's airports compared to those in neighbouring states with lower VAT rates.

- ANI

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Reader Comments

P
Priya S
Finally some relief for the aviation sector! Flights from Delhi have become so expensive lately. This 18% reduction should make a difference. But I hope they extend it beyond 6 months if it helps tourism recover. Delhi needs to stay competitive with other airports in the region.
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Kavya N
I appreciate the intent but why only 6 months? Airlines need long-term predictability. Also, the government talks about losing revenue but doesn't mention how they'll compensate. Will they cut other expenses or just pass the burden to common people through other taxes? 🤨
A
Arjun K
This aligns well with PM Modi's vision of making India a global aviation hub. Delhi being the capital should lead by example. Lower ATF costs mean cheaper tickets for passengers and more flights to smaller cities. Good to see state government thinking beyond just revenue! 👏
R
Rohit P
The article mentions Maharashtra's airports will benefit too... but what about states like Karnataka or Tamil Nadu? Regional imbalance is a concern. Every state should reduce VAT to at least single digits if we want consistent growth across India. 25% was really too high for an essential input like ATF.
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Aman W
Good decision but it's only for 6 months. What happens after? Airlines will plan accordingly. Also, ₹985 crore is a lot - hope Delhi government has a plan to recover it through other means. But for now, as someone who flies frequently for work, I'm happy! 🛫

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