India’s GST Council has rejected the airline industry’s proposal to bring Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) framework. The announcement was made by Finance Minister Nirmala Sitharaman following a meeting on 21 December 2024.
“States are unwilling to include ATF under the GST framework, similar to their stance on petrol and diesel,” Finance Minister Nirmala Sitharaman stated following Saturday’s GST Council meeting.
Currently, ATF is subject to both central excise duties and varying state-specific VAT. Airlines argue that the existing taxation framework increases fuel expenses for carriers. As input taxes are not deductible from the sale of ATF, the resultant tax burden ultimately escalates the operational costs for airlines, which may, in turn, influence ticket prices.
