India
Tamil Nadu ATF VAT cut runs until October 31
Livemint·
Tamil Nadu Chief Minister Vijay's government cut Value Added Tax on aviation turbine fuel through three gazette notifications issued on Friday. The reductions stay in force for one year, until 31 October 2027. Civil Aviation Minister Ram Mohan Naidu thanked Vijay on X for the step. Fuel has recently risen to about 55-60 percent of airline operating costs, Livemint reported.
Prism
What It Means For You
- Lower ATF VAT in Tamil Nadu can cut airline operating costs on flights using the state's airports for one year.
- Whether carriers pass savings into ticket prices is not stated in the source reporting.
- Industries Minister Virudhai Magal Keerthana said lower costs can support more routes beyond Chennai.
What's Happening
- Naidu called the VAT reduction a welcome step and thanked Chief Minister Vijay.
- He said Centre-state coordination is needed to keep air travel affordable for passengers.
- The Federation of Indian Airlines had warned it may cut flights on unviable routes as ATF prices rose.
Why states control ATF tax rates
- ATF sits outside GST, so states set their own VAT rates.
- Fuel traditionally made up about 30-40 percent of airline costs before the recent rise to about 55-60 percent.
- Livemint linked higher jet fuel prices to the US-Iran war that began in February and to longer routings.
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