Maha govt cuts VAT on ATF; Piyush Goyal urges Congress-ruled states to follow

Mumbai, May 15 The Maharashtra government announced a significant reduction in the Value Added Tax on Aviation Turbine Fuel, effective from May 15 and applicable until November 14, 2026.

The state Finance Department issued a notification lowering the tax rate to 7 per cent, down from the previous 18 per cent.

This 11-percentage-point cut is intended to provide temporary relief to airlines and help stabilise surging airfares during the peak summer travel season.

Finance Department sources said, “The objective is to mitigate the impact of rising global fuel prices and the ongoing West Asia crisis on operational costs. Mumbai, being a major aviation hub, is expected to see the most significant benefit, potentially leading to more competitive ticket pricing for travellers.”

Civil Aviation Minister Kinjarapu Rammohan Naidu welcomed the move, noting that the reduction would help keep airfares in check while global challenges continue to push costs upwards.

This follows a previous reduction in 2023 when the state lowered Value Added Tax from 25 per cent to 18 per cent.

Meanwhile, Union Commerce Minister Piyush Goyal on Friday asked the Congress-led Opposition governments in Kerala, Karnataka, and Telangana to follow the Bharatiya Janata Party-led Maharashtra government in cutting Value Added Tax on Aviation Turbine Fuel.

Speaking to reporters at the Santacruz Electronics Export Processing Zone here, Goyal said the austerity measures suggested by PM Modi are voluntary in nature and added that every patriotic Indian should help in times of crisis.

“I hope that the few states where the Congress continues to be in power -- Karnataka, Kerala, and Telangana -- will also look into this Aviation Turbine Fuel issue and take up the challenge of undertaking pro-people measures,” the Union Minister, who is also the Member of Parliament from Mumbai North, said.

He congratulated Maharashtra Chief Minister Devendra Fadnavis for cutting the Value Added Tax on Aviation Turbine Fuel to 7 per cent from the earlier 18 per cent, pointing out that this will help reduce air freight charges, assist exporters travelling in search of newer markets, and also attract tourists.

Replying to a specific question on whether there is a move to put restrictions on the Liberalised Remittance Scheme after the austerity measures for saving foreign exchange, Goyal explained that PM Modi’s appeal is voluntary.

“He has made an appeal, he has made a request, and I am sure all of you also will be having a feeling for the country, that patriotism, that we must all contribute to nation-building,” he said.

“This is the time when there is a crisis, when we all tighten our belts,” the Union Minister added.

Commenting on the Rs 3 fuel hike announced earlier in the day, the Union Minister said the decision under PM Modi should be welcomed, as there had been rumours of a hike of over Rs 15 per litre.

Goyal further said that the Commerce Ministry is looking at consolidating its presence in the financial capital into fewer locations.

He added that the vacated space could be put to productive use.

At present, there are 20 offices of 12 organisations under the Ministry scattered across the city, and in some cases, the offices have a thin employee presence.

He cited the case of the Export Credit Guarantee Corporation leasing space to the Maharashtra government entity, Maharashtra Institution for Transformation, which is also yielding the former Rs 2 crore per year in rent.

Goyal also said that many of the buildings in the Santacruz Electronics Export Processing Zone are nearly 50 years old and that the zone in the western suburbs will undergo a major redevelopment drive.

--IANS

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