The Delhi government has brought major relief for airlines and passengers as it reduced the Value Added Tax (VAT) on aviation turbine fuel (ATF) to a massive 7% from 25% on Saturday. The decision was taken during a Cabinet meeting chaired by Chief Minister Rekha Gupta.
ATF is used to power jet engines to fly planes.
The decision means that airlines purchasing jet fuel for their aircraft at Delhi's Indira Gandhi International Airport will have to pay lower prices from now on due to the VAT reduction.
The decision is set to majorly impact airlines operating in the national capital as they grapple with high jet fuel prices due to the energy supply disruptions in the Strait of Hormuz brought on by the Iran war.
As VAT on aviation turbine fuel is levied solely by state governments, the applicable tax rate depends on the location where the fuel is purchased rather than the flight’s destination.
