Maharashtra extends seven per cent VAT relief on aviation fuel

MUMBAI: The Maharashtra government has extended the concessional seven per cent value-added tax (VAT) on aviation turbine fuel (ATF) until April 14, 2027, allowing airlines to continue benefiting from the reduced tax rate for another five months. The decision was announced through a Finance Department notification dated November 12.

The earlier concession, which was scheduled to expire on November 14, was introduced on May 14, when the state government reduced VAT on ATF from 18 per cent to seven per cent for six months, effective May 15. The lower rate applies to duty-paid aviation fuel.

The extension is expected to provide continued relief to airlines operating in the state, particularly at major airports in Mumbai, Navi Mumbai and Pune, where the earlier tax structure included an 18 per cent levy. Aviation turbine fuel is one of the biggest operating expenses for airlines, accounting for approximately 40 to 50 per cent of their total costs.

The initial tax reduction came amid rising global crude oil prices and disruptions to airline operations caused by the conflict in West Asia. Higher fuel prices had increased financial pressure on carriers, prompting the state to introduce the temporary concession.