Delhi Slashes Aviation Fuel Tax to Boost Travel Industry

The Delhi government has announced a reduction in VAT on aviation turbine fuel from 25% to 7% for six months. This decision aims to support the struggling airline industry amid global challenges but will result in a revenue loss of Rs 985 crore for the government.

In a significant move to bolster the travel and aviation sector, the Delhi government on Saturday announced a substantial reduction in the Value Added Tax (VAT) on aviation turbine fuel (ATF). The tax, which stood at 25%, will be slashed to just 7%, providing relief to the struggling airline industry.

Chief Minister Rekha Gupta emphasized the importance of this decision, despite the financial implications for the state's revenue. The tax reduction is set to cost the Delhi government approximately Rs 985 crore over the next six months. This initiative aligns with Prime Minister Narendra Modi's broader vision to enhance travel accessibility and boost business activities.

This tax cut is part of a series of measures taken to sustain the competitiveness of Delhi as a travel hub, amidst varied VAT rates across Indian states, ranging from 4% to 30%. By reducing ATF costs, the government aims to strengthen tourism, trade, and transport sectors in the capital.