Delhi Cuts VAT On Aviation Turbine Fuel From 25% To 7%

New Delhi: In a huge relief to airlines and passengers, the Delhi government on Saturday decided to reduce the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 25% to 7%. Following this move, airlines purchasing fuel at Delhi airport will have to pay lower prices.

The announcement was made by the Chief Minister's Office (CMO) following a Cabinet meeting chaired by CM Rekha Gupta. The move will benefit airlines which are grappling with increasing fuel prices. Lower ATF taxes could help airlines manage cost pressures and limit fare hikes.

Following the announcement, flights from Delhi are expected to get cheaper.

Delhi CMO said, “Amidst the changing global circumstances related to fuel, the Delhi Cabinet…has taken a significant decision to reduce the VAT on Aviation Turbine Fuel (ATF) from 25% to 7% to provide relief to air passengers. This concessional rate will remain in effect for the initial 6 months. This decision will help make air travel more convenient and affordable. At the same time, Delhi's connectivity will be strengthened, and it will also boost trade, investment, and employment. This decision is an important step towards strengthening the resolve for public convenience and a developed Delhi.”

The decision of the Delhi government comes just days after the the Maharashtra government reduced VAT on ATF from 18% to 7%.

Global fuel prices are jumping due to the ongoing war in the Middle East between US-Israel and Iran, which has disrupted the energy supply chains.