Aviation Ministry Suggests Including ATF Under GST Amid Rising Fuel Costs

Fuel prices have gone up sharply, especially aviation turbine fuel (ATF), which airlines use to operate flights. Because of rising crude oil prices after the recent United States-Israel-Iran war, ATF prices have increased by more than 100 per cent. This has put heavy financial pressure on airlines.

The Ministry of Civil Aviation has suggested that ATF should be brought under the Goods and Services Tax (GST) system. This proposal has been sent to the Ministry of Finance and may be discussed in the next GST Council meeting after the elections.

Airlines have been demanding this change for a long time. Currently, individual states impose their own taxes on ATF, which makes it more expensive. Because aviation turbine fuel (ATF) makes up about 40% of an airline’s ticket cost, it has a major impact on the company’s revenue and profit margins

However, state governments earn a significant amount of revenue from taxes on ATF. Therefore, the proposal can only move forward if the states agree.

Although similar suggestions were made in the past and were not approved, the current sharp rise in fuel prices has revived the discussion. Many stakeholders in the aviation sector are again asking the government to provide relief to the industry. The GST Council meeting is expected to take place post-elections.