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Maharashtra Slashes ATF VAT to 7% to Ease Airfare Crisis

Maharashtra has reduced VAT on Aviation Turbine Fuel from 18% to 7% to ease airfare pressure amid the West Asia crisis. Union Civil Aviation Minister Kinjarapu Ram Mohan Naidu thanked Chief Minister Devendra Fadnavis for the timely intervention. The move is expected to benefit the state's 16 airports and 75 million annual passengers by lowering operational costs. The Centre has also taken measures like capping ATF prices and reducing airport charges to support the aviation sector.

Key Points: Maharashtra Cuts ATF VAT to 7% Amid West Asia Crisis

  • VAT on ATF reduced from 18% to 7% in Maharashtra
  • Move aims to ease airfare pressure amid West Asia crisis
  • ATF accounts for 30-40% of airline operating costs
  • State has 16 airports with 75 million annual passengers
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Maharashtra cuts ATF VAT to 7% from 18% amid West Asia crisis to ease airfare pressure

Maharashtra reduces VAT on Aviation Turbine Fuel from 18% to 7% to relieve airlines and passengers amid rising costs from the West Asia crisis.

"This reduction in VAT will help the flight operations in all these airports and benefit the large number of passengers - Kinjarapu Ram Mohan Naidu"

New Delhi, May 15

The Maharashtra government has reduced the Value Added Tax on Aviation Turbine Fuel from 18% to 7%, a move expected to provide relief to airlines and passengers amid rising operational costs due to the ongoing West Asia crisis.

The reduction came into effect on Friday, Union Civil Aviation Minister Kinjarapu Ram Mohan Naidu said in a post on X.

Naidu thanked Maharashtra Chief Minister Devendra Fadnavis for the "timely intervention," noting that the decision would help keep airfares in check at a time when global challenges are pushing costs upwards.

"Maharashtra State has 16 operational airports and the highest annual air traffic amongst the states, of around 75 million passengers, with daily passengers of around 2 lakhs. This reduction in VAT will help the flight operations in all these airports and benefit the large number of passengers," he said.

The Indian aviation sector has been grappling with airspace closures, uncertain operations and a sharp spike in ATF prices following the escalation of tensions in West Asia. ATF typically accounts for 30-40% of an airline's operating costs, making it one of the largest expense heads for carriers. With crude oil prices volatile due to geopolitical risks, airlines have faced pressure on margins and fare structures.

The Centre has already introduced several measures to cushion the impact. Under the leadership of Prime Minister Narendra 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% to 30%.

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

The reduction comes at a time when airlines are already under strain due to higher input costs and disrupted international routes. Industry experts say such state-level interventions can provide immediate relief while global conditions stabilise. Naidu said the ministry continues to work with other states to encourage similar measures to support the aviation sector during volatile periods.

- ANI

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Reader Comments

A
Ananya R
This is good news for sure, but I hope the savings actually get passed on to passengers. Airlines have a history of pocketing such benefits. Also, why is VAT on ATF still so high in many states? Some states charge 30%! That's ridiculous for an essential service like aviation. Uniform GST on ATF should be brought in ASAP.
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Rohit P
Good step but this is just a band-aid. The real issue is the crazy geopolitical tensions in West Asia driving up crude prices. India imports most of its ATF raw materials, so any global shock hits us hard. States reducing VAT helps, but Centre also needs to look at long-term solutions like strategic oil reserves and alternative fuel sources. Just my two paise.
S
Siddharth J
As someone who travels often between Mumbai and Delhi, these small reductions matter. But I think the bigger issue is that Maharashtra had one of the highest ATF VAT rates (18%) while states like Gujarat and UP have lower rates. This was making Mumbai airport less competitive. Better late than never I guess. Kaam toh acha kiya hai! 😊
M
Meera T
This is great for fliers in Maharashtra, but what about other states? The article says Centre is working with other states, but we need action. Every state should reduce VAT to single digits to help the aviation sector. In a country as big as India, air travel is not a luxury anymore, it's a necessity for many. Especially now with West Asia crisis affecting routes, we need all the help we can get.
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Riya H
Happy to see this! I book flights for my family often and

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