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Air India, IndiGo and SpiceJet Urge Government to Bring Aviation Turbine Fuel Under GST

by Economy India
July 8, 2026
Reading Time: 3 mins read
Air India, IndiGo and SpiceJet Urge Government to Bring Aviation Turbine Fuel Under GST

Air India, IndiGo and SpiceJet Urge Government to Bring Aviation Turbine Fuel Under GST

SHARESHARESHARESHARE

Mumbai (Economy India):India’s leading airlines—Air India, IndiGo and SpiceJet—have urged the Central Government to bring Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) regime, saying the move would significantly reduce operating costs and improve the competitiveness of the country’s aviation sector.

The demand comes as airlines continue to grapple with high fuel costs, with ATF accounting for one of the largest components of airline

operating expenses.

Air India, IndiGo and SpiceJet Urge Government to Bring Aviation Turbine Fuel Under GST
Air India, IndiGo and SpiceJet Urge Government to Bring Aviation Turbine Fuel Under GST

Airlines Seek Tax Reforms

Currently, Aviation Turbine Fuel is taxed under state-level Value Added Tax (VAT), with rates varying across states. The absence of GST on ATF prevents airlines from claiming input tax credits, increasing their overall cost of operations.

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According to industry stakeholders, bringing ATF under GST would simplify the tax structure and enhance operational efficiency.

Expected Benefits

Airlines believe that including ATF under GST would provide several advantages, including:

  • Lower operating costs
  • Availability of input tax credit
  • Uniform taxation across states
  • Improved cash flow for airlines
  • Greater financial sustainability
  • Potential reduction in airfares over the long term

Fuel typically accounts for 35–45% of an airline’s operating expenses, making tax reforms a key priority for the industry.

Industry Push for Long-Pending Reform

The aviation industry has repeatedly requested the inclusion of ATF under GST over the past several years. Industry experts argue that such a move would align India’s taxation framework with global best practices and support the government’s vision of making air travel more affordable.

Any decision to bring ATF under GST would require approval from the GST Council, which includes representatives of both the Central and State Governments.

Outlook

As India’s aviation market continues to expand, stakeholders believe that rationalising fuel taxation could improve airline profitability, encourage investment, strengthen regional connectivity and support the long-term growth of the country’s civil aviation sector.

(Economy India)

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Source: Economy India
Tags: Air Indiaairline fuel taxATF under GSTAviation IndustryAviation Turbine FuelEconomy India.GST CouncilIndian AviationIndiGoSpiceJet
Economy India

Economy India

Economy India is one of the largest media on the Indian economy. It provides updates on economy, business and corporates and allied affairs of the Indian economy. It features news, views, interviews, articles on various subject matters related to the economy and business world.

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