Union Minister Jyotiraditya Scindia To Work With States To Reduce VAT On Jet Fuel

Union Civil Aviation Minister Jyotiraditya Scindia has assured the industry that he will ensure that all states in India reduce taxes on jet fuel.

Currently, fuel costs make up 40 per cent of an airline’s operational costs.

Scindia claimed that close cooperation is being carried out with states regarding concerns over high value-added tax (VAT) rates.

“Task is not yet complete... Today, I have 13 more states left to deal with. I commit to you that I would not rest until we make that burden of the high level of VAT lower,” the union minister said in the ASSOCHAM conference, as reported by the Economic Times (ET).

The centre will reportedly consider bringing jet fuel under the ambit of goods and services tax (GST) at the GST council meeting.

Further, Scindia revealed that a policy for regional aircrafts and helicopters is under the works as of now.

With regards to the jet fuel costs, Scindia recently told ET, “Prior to my taking over, 12 states and union territories had VAT on ATF (aviation turbine fuel) ranging from 1% to 5% and there were 24 states and UTs that had VAT ranging from 20% to 30%.”

He added, “We worked assiduously with all states and, I am pleased to inform you that 11 states have reduced their VAT from prohibitive levels of 25-30% down to less than 1-5%. Today, 23 states are below 5% and only 13 states above 15%.”