Delhi govt cuts VAT on aviation turbine fuel from 25% to 7% amid rising airline costs
&imwidth=600&imheight=450&format=webp&quality=medium "Delhi govt cuts VAT on aviation turbine fuel from 25% to 7% amid rising airline costs")
Representative Photo Photograph: (ANI)
The move aimed to ease the burden on passengers and airlines, which are reeling under pressure from rising fuel costs amid the continuing conflict in West Asia and the closure of the vital Strait of Hormuz.
The Government of Delhi on Saturday (May 16) announced a sharp reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF), bringing the rate down from 25 per cent to 7 per cent in a move aimed at reducing operational pressure on airlines and offering relief to passengers.
According to the Chief Minister’s Office, the decision is expected to lower fuel costs for airlines at a time when the aviation sector is facing rising expenses due to high crude oil prices and disruptions linked to tensions in West Asia.
“Delhi government has decided to reduce the value-added tax (VAT) on aviation turbine fuel (ATF) from the existing 25 per cent to 7 per cent, a move which is likely to benefit the airlines and common passengers,” the official statement said.
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The announcement came a day after the Maharashtra government reduced VAT on ATF from 18 per cent to 7 per cent for a six-month period starting May 15.
ATF accounts for nearly 30 to 40 per cent of an airline’s operating expenditure and has remained under pressure due to geopolitical instability, supply chain disruptions and volatility in global crude oil prices.
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The aviation industry has also been affected by continuing conflicts in West Asia and periodic airspace restrictions, which have pushed up fuel expenses and impacted airline finances. Several carriers have adjusted ticket prices on busy domestic routes to manage the rising costs.
