Centre praises Tamil Nadu CM’s aviation fuel tax reduction

CHENNAI The Centre has welcomed Tamil Nadu’s decision to reduce value-added tax (VAT) on aviation turbine fuel (ATF), with Union Civil Aviation Minister Ram Mohan Naidu praising Chief Minister C Joseph Vijay for the move aimed at supporting the aviation sector. Under the revised tax structure, VAT on ATF at Chennai airport has been reduced from 29 per cent to 16 per cent. At all other airports across Tamil Nadu, the rate has been lowered to one per cent. Naidu said cooperation between the Centre and state governments was essential to making air travel more affordable and improving the aviation sector’s growth prospects. “Appreciate the Tamil Nadu Government’s decision to reduce VAT on Aviation Turbine Fuel (ATF), a welcome step for the aviation sector,” the union minister said in a post on X. “Thank you to Hon’ble Chief Minister Thiru for this initiative. Making air travel more affordable requires the Centre and States to work together. Our shared priority must always be the passengers,” he added. The tax reduction is expected to support airlines by lowering fuel-related costs at airports in the state. Aviation turbine fuel is a major component of airline operating expenses, and changes in taxation can influence the cost of operating flights. The announcement follows a similar move by the Goa government, which reduced VAT on aviation turbine fuel to seven per cent from October 24. Naidu also welcomed that decision, highlighting its potential to improve air connectivity and support tourism. In his remarks on Goa’s decision, the minister said lower fuel costs could benefit airlines, strengthen connectivity and help attract more visitors to the coastal state. The two state-level tax reductions come amid efforts to improve the affordability and accessibility of air travel. Lower taxes on aviation fuel can help reduce operating pressures on airlines, although the extent to which savings reach passengers depends on individual airline pricing decisions and other costs. The Centre has emphasised cooperation with state governments to strengthen aviation infrastructure, expand connectivity and keep passenger interests central to policy decisions.