The Maharashtra state government has reduced the Value Added Tax (VAT) on aviation turbine fuel from 18% to 7% [1].
This tax relief aims to support airlines grappling with increased operational costs caused by the West Asia crisis, rising fuel prices, and the need for longer flight routes [3, 5]. Fuel typically represents 35% to 40% of total airline operating costs [4].
The Finance Department of Maharashtra implemented the reduction effective May 15, 2024 [2]. The move specifically targets the financial strain on carriers operating within the state, including those utilizing the Mumbai airport [5].
There are conflicting reports regarding the duration of this tax break. Some sources indicate the cut will last for six months [3]. However, a notification from the Maharashtra finance department states the reduced VAT will remain applicable until Nov. 14, 2026 [3].
Government officials said the measure is intended to provide a buffer for the aviation sector as geopolitical instability in the Middle East continues to affect global flight paths and fuel availability [3, 5].
“Maharashtra reduced the Value Added Tax (VAT) on aviation turbine fuel from 18% to 7%.”
By lowering the VAT on aviation turbine fuel, Maharashtra is attempting to prevent a pass-through of high operational costs to passengers and to maintain the competitiveness of its aviation hubs. The significant disparity in reported end dates—ranging from six months to over two years—suggests the government may be reviewing the extension of the relief based on the stability of the West Asia crisis.
