Tamil Nadu chief minister C Joseph Vijay’s decision to cut taxes on aviation turbine fuel (ATF) has won praise from the Centre. Union civil aviation minister Ram Mohan Naidu on Friday welcomed the move and said Centre-state cooperation was key to making air travel more affordable.
Naidu thanked Vijay for the initiative and described the reduction as a positive step for the aviation sector. Under the revised tax structure, Tamil Nadu has reduced the Value-Added Tax (VAT) on ATF at Chennai airport to 16% from 29%, while the rate has been cut to 1% at all other airports in the state.
“Thank you to Hon’ble Chief Minister Thiru for this initiative. Making air travel more affordable requires the Centre and States to work together. Our shared priority must always be the passengers. Naidu also welcomed the decision by the Goa government, led by chief minister Pramod Sawant , saying the tax reduction could strengthen air connectivity and support the state’s tourism industry. “Lower fuel costs can support airlines, strengthen connectivity and give a further boost to Goa’s tourism sector. Reducing VAT on aviation turbine fuel lowers the tax component of airlines’ fuel bills, potentially easing their operating expenses.
This comes shortly after the Goa government reduced VAT on aviation turbine fuel to 7%, news agency PTI reported. The revised rate took effect from October 24, following a notification amending the relevant entry under Schedule C of the Goa Value Added Tax Act, 2005 . IndiGo had welcomed the Goa government’s decision on October 23, saying the revised tax structure could support the aviation ecosystem, improve air connectivity and strengthen tourism.
Because aTF remains outside India’s Goods and Services Tax ( GST ) framework, with VAT rates varying between states, state governments have a direct role in this area.
“Appreciate the Tamil Nadu Government’s decision to reduce VAT on Aviation Turbine Fuel (ATF), a welcome step for the aviation sector,” the Union minister said on X. On X, the minister said that lower fuel costs could benefit airlines, improve connectivity and help Goa attract more visitors. Steps like these put passengers and the growth of aviation first,” he said. High ATF prices combined with high state VAT rates have placed pressure on airline finances, according to PRS Legislative Research.
