The Maharashtra government has reduced value added tax (VAT) on aviation turbine fuel (ATF) from 18 per cent to 7 per cent for a period of six months starting Friday.
The decision was officially notified by the state finance department on Thursday under the Maharashtra Value Added Tax Act, 2002. According to the notification, the concession will remain in force until November 14. After this period, the previous tax rate of 18 per cent will be applicable unless the government extends or modifies the order.
“The amendment substitutes the existing 18 per cent tax rate with 7 per cent in Entry 6 of Schedule B appended to the Maharashtra Value Added Tax Act, 2002,” the official notification stated.
The move is expected to significantly bring down fuel costs for airlines operating in the state, improve air connectivity, and enhance the overall competitiveness of airports in Maharashtra. Industry experts believe that lower ATF prices will encourage airlines to add more flights, especially on regional and international routes, giving a boost to both business travel and tourism.
However, the finance department has acknowledged that the tax concession will result in a revenue loss of around Rs 600 crore to the state exchequer during the six-month period.
Union Commerce Minister Piyush Goyal welcomed the decision and urged other states, particularly those ruled by the Congress, to follow Maharashtra’s example.
Piyush Goyal urges Congress-ruled states to follow Maharashtra’s ATF VAT cut
Speaking to reporters at SEEPZ in Mumbai on Friday, Goyal said, “I hope that the few states where the Congress continues to be in power — Karnataka, Kerala and Telangana — will also look into this (ATF) issue and take up the challenge of undertaking pro-people measures.”
He congratulated Maharashtra Chief Minister Devendra Fadnavis for taking the step, saying it would reduce air freight charges, help exporters explore new markets, and attract more tourists to the state. Goyal described the decision as a forward-looking move that aligns with the Centre’s efforts to support the aviation and logistics sectors.
He also addressed the Rs 3 per litre fuel price hike announced earlier in the day and said people should welcome the modest increase under Prime Minister Narendra Modi’s leadership, especially as there were widespread rumours of a much steeper hike of over Rs 15 per litre.
On the broader issue of austerity measures suggested by Prime Minister Modi, Goyal clarified that these are voluntary in nature.
“He has made an appeal, he has made a request and I am sure all of you also will be having a feeling for the country — that patriotism — that we must all contribute to nation building,” he stated. “This is the time when there is a crisis when we all tighten our belt,” the Union minister added.
(With PTI inputs)
