📷 Image: Wikimedia Commons / Ministry of Finance of India
Business
Maharashtra Extends 7% VAT on Jet Fuel Till April 2027, Boosting Airlines
✍️ Livemint
🗓 15 Nov 2026, 09:01 PM
👁 34
The Maharashtra government has prolonged the 7% value‑added tax on aviation turbine fuel (ATF) until April 2027, offering continued cost relief to domestic airlines.
Mumbai, Maharashtra – The state cabinet approved an extension of the 7% VAT on aviation turbine fuel (ATF) until April 2027, keeping the tax rate unchanged from the current schedule. The decision, announced through a circular from the Finance Department, aims to provide stability to the aviation sector amid fluctuating global fuel prices.
Industry analysts say the move will help airlines contain operating costs, as ATF accounts for a significant portion of an airline’s expense sheet. By avoiding a potential tax hike, carriers can maintain fare structures and potentially pass on savings to passengers.
The state government estimates that the extension will result in a modest dip in revenue from fuel taxes, but officials argue that the broader economic benefit—through sustained airline operations and associated tourism activity—justifies the short‑term loss.
Airline trade bodies welcomed the measure, describing it as a timely intervention that aligns with the central government's broader push for a more competitive aviation market. They also urged the state to consider further incentives, such as reduced airport charges, to complement the tax relief.
Looking ahead, the Finance Department will review the VAT rate in 2027, taking into account global oil trends and the fiscal health of the state budget.
Industry analysts say the move will help airlines contain operating costs, as ATF accounts for a significant portion of an airline’s expense sheet. By avoiding a potential tax hike, carriers can maintain fare structures and potentially pass on savings to passengers.
The state government estimates that the extension will result in a modest dip in revenue from fuel taxes, but officials argue that the broader economic benefit—through sustained airline operations and associated tourism activity—justifies the short‑term loss.
Airline trade bodies welcomed the measure, describing it as a timely intervention that aligns with the central government's broader push for a more competitive aviation market. They also urged the state to consider further incentives, such as reduced airport charges, to complement the tax relief.
Looking ahead, the Finance Department will review the VAT rate in 2027, taking into account global oil trends and the fiscal health of the state budget.