Mumbai, Jun 10 (KNN) The Maharashtra government has announced a reduction in the Value Added Tax (VAT) on aviation turbine fuel (ATF) or jet fuel from 25 per cent to 18 per cent.

This move aims to ease the financial burden on airlines and foster growth in the civil aviation sector within the state.

Jet fuel constitutes a significant portion of operational costs for airlines globally, accounting for around 18-19 per cent of total expenses.

However, for Indian carriers, this figure is much higher at approximately 40 per cent. The high taxation on ATF has been a longstanding grievance voiced by the aviation industry.

Maharashtra, being the most industrialised state with major aviation hubs like Mumbai and Pune, plays a pivotal role in the country's air traffic.

Mumbai alone handled 14 per cent of India's international and domestic air traffic in 2023.

The reduced VAT on jet fuel is expected to provide relief to airlines operating in the state, potentially leading to lower ticket prices for customers.

This aligns with the central government's objective of making air travel more affordable for the masses.

Aviation stakeholders have welcomed the decision, anticipating that the tax cut will enhance the competitiveness of the sector and spur further growth in air connectivity within and beyond Maharashtra.

(KNN Bureau)