Mumbai: The Maharashtra government has reduced Value Added Tax (VAT) on aviation turbine fuel (ATF) from 18 per cent to 7 per cent in a move aimed at easing operational costs for airlines and strengthening the state’s aviation sector.
The decision is expected to lower fuel expenses for carriers operating in Maharashtra, where ATF constitutes a major portion of airline operating costs. Industry experts believe the tax reduction could help improve airline profitability and support expansion of air connectivity.
Officials said the move is intended to make airports in Maharashtra more competitive and encourage increased flight operations, particularly at major aviation hubs such as Mumbai and Pune.
The reduction in VAT is also expected to benefit passengers over time by helping airlines manage rising operational pressures linked to fuel prices and maintenance costs.
Aviation industry stakeholders have welcomed the decision, noting that lower taxation on fuel can improve route viability and enhance overall sector growth.
The development comes at a time when airlines continue to navigate fluctuating crude oil prices and growing demand for domestic and international air travel.