Mumbai: The Government of Maharashtra on Friday reduced value-added tax (VAT) on aviation turbine fuel (ATF), or jet fuel, from 18 per cent to 7 per cent for a period of six months, providing major relief
to airlines grappling with soaring fuel costs amid the ongoing West Asia crisis.
Order Issued Today, To Remain In Effect Till 6 Months
According to an official notification issued under the Maharashtra Value Added Tax (MVAT) Act, 2002, the revised VAT rate came into effect from May 15 and will remain applicable till November 14, 2026.
“In the Schedule ‘B’ appended to the Maharashtra Value Added Tax Act, 2002, in entry 6, in column (3), for the figures and sign ‘18%’, the figures and sign ‘7%’ shall be substituted,” the notification stated. The order was issued by the Finance Department from Mantralaya in Mumbai and signed by Deputy Secretary Sanjay Kandhare.
The move comes at a time when fuel prices across India have risen sharply following disruptions in global energy supply chains caused by tensions in the Gulf region, rising crude oil prices and the weakening Indian rupee. The Centre on Friday also increased petrol and diesel prices by Rs 3 per litre nationwide.
Aviation Ministry Engages In Huddle With Several States For Lowering VAT
The decision followed discussions between the Ministry of Civil Aviation and multiple state governments regarding a reduction in ATF taxes. According to reports, the ministry had recently held meetings with Maharashtra, Delhi, Tamil Nadu and West Bengal over lowering VAT on aviation fuel amid the ongoing supply disruptions.
Before the latest revision, Maharashtra levied 18 per cent VAT on ATF, while Tamil Nadu imposed 29 per cent and Delhi 25 per cent, among the highest rates in the country.
Aviation Minister Thanks CM Fadnavis For VAT Reduction
Union Civil Aviation Minister Ram Mohan Naidu Kinjarapu welcomed the decision and thanked Maharashtra Chief Minister Devendra Fadnavis for acting swiftly. “One of the important expenditures in the aviation industry is the VAT on ATF that is levied by state governments,” the minister said in a post on X, adding that the ministry had been engaging with states to reduce taxes during the current crisis.
“I am thankful to the State Government of Maharashtra and Devendra Fadnavis ji for rising to the occasion and notifying the reduction in VAT for ATF from 18% to 7% with effect from today,” he added.
Kinjarapu also highlighted Maharashtra’s importance in the aviation sector, noting that the state has 16 operational airports and handles nearly 75 million passengers annually. He said the VAT cut would help airlines manage operational costs and keep airfares under control despite mounting global pressures.
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