Delhi cuts ATF VAT from 25% to 7% for six months starting May 15

Delhi’s government has cut the Value Added Tax on aviation turbine fuel from 25% to 7% for six months, a move officials said is intended to lower costs for airlines and help keep airfares stable amid global fuel-market volatility.

Chief Minister Rekha Gupta approved the decision during a cabinet meeting on Saturday, according to the Chief Minister’s Office. The reduced rate will apply from May 15 to November 14, after which the previous tax rate would resume unless the government extends or changes it. The Chief Minister’s Office said the measure is expected to benefit airlines and common passengers, noting that ATF is a significant input for carriers.

In a statement attributed to the government, it said the concession is likely to benefit airlines and common passengers. Gupta also said the tax cut would come with an estimated revenue loss of about Rs 985 crore for the Delhi government. The government said it is aligned with national efforts to support travel, tourism and business activity, alongside Delhi’s aim of maintaining its position as a major aviation and connectivity hub.

Officials pointed to the structure of India’s tax system as a reason ATF is still subject to...