No Recommendation To Bring Aviation Fuel Under GST, Clarifies Civil Aviation Minister; Highlights Price Reduction Efforts

The Centre in response to tax treatment of Aviation Turbine Fuel (ATF), has clarified that the GST Council, in which the states are also represented, has not made any recommendation for inclusion of ATF under GST.

As for taxation on ATF, the Centre put forth that issue of high Value Added Tax (VAT) levy on ATF ranging from 0% to 29% in some States and Union Territories was addressed, resulting in reduction of VAT by 21 States and Union Territories. The Centre pointed out that under the Regional Connectivity Scheme (RCS) – UDAN the central excise duty is only 2% for flights as opposed to 11% central excise duty on ATF together with different rates of VAT.

On the question of comparison with neighbouring aviation market, the Centre clarified on ATF pricing consultations between the airlines and the Public Sector Oil Marketing Companies on rationalisation is underway. It was suggested that Mean of Platts Arab Gulf (MOPAG) pricing has been adopted by the Aviation Ministry to bring more transparency and parity between jet fuel prices globally and in India. Further, it was pointed out that factors like real time demand, competitive forces, seasonality, operational considerations, international product prices and other market conditions also add to ATF pricing issues, airline operating expenses and airfares

Click here to read answer by the Minister of State In The Ministry of Civil Aviation, Shri Murlidhar Mohol.