Aviation Minister asks Karnataka to cut taxes on ATF

With high taxes on aviation turbine fuel (ATF) having become an impediment to aviation growth, Civil Aviation Minister Ashok Gajapathi Raju has asked the Karnataka government to reduce its taxes.

Currently, Karnataka imposes sales tax of 28 per cent on ATF — making it among the highest in the country. Neighbouring Andhra Pradesh, for instance, has just 1 per cent ATF tax.

“Taxes account to 40 per cent of the airline’s costs, and are an impediment to MRO (Maintenance, Repair and Overhaul) activity…We need to simplify the tax structure to make the sector attractive,” said the Minister, during the launch of operations of the Bengaluru-based regional airline, Air Pegasus, here on Sunday. He said the Centre has written to Chief Ministers urging them to reduce taxes in their respective States.