Overview
- Delhi, which approved the change Saturday, lowered VAT on aviation turbine fuel to 7% from 25% to reduce airline costs.
- Maharashtra, whose order took effect Friday, set the levy at 7% for six months to November 14 under a state Finance Department notification.
- Both decisions respond to a jet-fuel price surge linked to regional tensions as the Civil Aviation Ministry urges other high‑VAT states to act.
- ATF accounts for roughly 30–40% of airline operating costs and, because VAT is charged as a percentage of price, the lower rate helps restrain fares even if ticket prices do not drop right away.
- In Maharashtra, the 7% rate applies to domestic flights only and officials estimate a ₹550–600 crore annual revenue hit for the state, which could translate into steadier schedules and fewer fuel surcharges for travelers.