New Delhi : The central government said on Tuesday that it has requested state governments to reduce value added tax (VAT) on jet fuel to provide relief to the airline sector which is suffering due to the high cost of fuel.
Minister of State for Civil Aviation Mahesh Sharma told the Rajya Sabha during Question Hour that fuel constitutes about 40-50 percent of the operation cost of an airline and that the finance ministry was requested that jet fuel be included under declared goods.
“Government is concerned over financial health of all airlines including budget airlines. No financial package is planned for budget airlines by the government,” the minister said in a written reply.
Currently, ATF (aviation turbine fuel) sold in the country is nearly 50-60 percent costlier than in overseas markets like Bangkok, Singapore or Dubai as an additional 4-34 percent state sales tax hikes the price.