In a decision that has high potential to reduce the cost of flying, the Commercial Taxes department has decided to drastically slash the Value Added Tax (VAT) on aviation turbine fuel (ATF).
Revenue Secretary (commercial taxes and excise) S.P. Singh issued notification reducing the rate of tax on ATF from 16 per cent to one per cent. When contacted, an airline company official said the government’s decision would benefit the passengers as ticket prices would come down because the cost of ATF accounts for 60 per cent of the total operating cost.