Maharashtra Cuts Tax on Jet Fuel

Reduced VAT on Jet Fuels

In a bid to foster the aviation industry, the government of Maharashtra has implemented its earlier announced decision of cutting down the Value Added Tax on jet fuel. The VAT, which earlier stood at 25%, has now been lowered to 18%. The change will bring relief to all aviation businesses in the area and will give a boost to civil aviation.

The news also puts India at par with the rest of the world, as globally, the tax on jet fuel is usually around 18-20%, and the figure was significantly higher in India. As Maharashtra houses two major civil aviation areas in India – Mumbai and Pune, the news comes as a relief to the industry as Mumbai handles around 14% of all air traffic in India. The industry is now waiting for other states to follow through with the example and slash the taxes.

So far, areas like Andaman and Nicobar Islands, Uttarakhand, Jammu and Kashmir, Ladakh, Tripura, Madhya Pradesh, Himachal Pradesh, Uttar Pradesh, Arunachal Pradesh, Haryana, Dadra and Nagar Haveli, Daman and Diu, Manipur, Jharkhand, Karnataka, and Mizoram have reduced VAT on jet fuel. Gujarat and Goa saw the biggest reduction in VAT with Gujarat bringing it down from 30% to 5% and Goa from 18% to 8%.