No Decision Yet On Jet Fuel Tax Cut, Say Government Sources

Story Highlights
  • Aviation ministry continues talks on Jet Fuel tax cut.
  • Centre demands states to lower high taxes on ATF.
  • ATF makes up for about 40 per cent of the operating cost of an airline.

New Delhi: According to sources in the know, the centre has not yet taken a view on the civil aviation ministry’s plea for tax cuts on jet fuel or aviation turbine fuel (ATF) to bring down prices.

“They (Civil Aviation Ministry) have approached us with a plea to moderate the prices. However, no decision has been taken yet,” the source said.

The latest development comes after Civil Aviation minister, Jyotiraditya Scindia has been making a case for lowering the high taxes on ATF even as most states have already moved to significantly reduce the value-added tax (VAT).

The source added that the Centre has been holding a dialogue with the Finance Ministry over the issue from several days now.

As many as 23 states including those ruled by the BJP have reduced VAT. However, there seems to be no cut down in prices of the states hosting the countries busiest airports.

ATF makes up for about 40 per cent of the operating cost of an airline. Jet fuel prices are at a record high in line with the global surge in energy prices. And since India is 85 per cent dependent on imports to meet its oil needs, the only way to cut jet fuel prices is to reduce taxes.

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