Jet Fuel Kept Out Of GST Due To States' Pushback, Aviation Ministry Tells Parliament
Aviation Turbine Fuel (ATF) will continue to remain outside the GST framework after several states opposed its inclusion during deliberations at the GST Council, the Centre said.
Replying to a question in the Lok Sabha, the Civil Aviation Ministry said the proposal to bring Aviation Turbine Fuel (ATF) under GST was taken up at the 55th GST Council meeting in December 2024.
However, the proposal failed to secure consensus as multiple states expressed reservations over the move.
As a result, the existing tax framework has been retained, with ATF continuing to be taxed outside the GST system.
The ministry informed Parliament that the GST Council considered the proposal, but the views expressed by several state governments were against including aviation fuel under the indirect tax regime.
Consequently, no decision was taken to alter the current structure.
ATF is one of the largest cost components for airlines, and carriers have long sought its inclusion under GST, arguing that it would allow them to claim input tax credits and reduce operating costs.
At present, ATF attracts state-level value-added tax (VAT), with rates varying across states, adding to airlines' fuel expenses.
The latest clarification indicates that, despite industry demands, the proposal remains stalled due to the lack of agreement among states in the GST Council, where tax-related decisions are taken through consensus between the Centre and state governments.
The ministry's statement confirms that there has been no change in policy, and ATF will continue to remain outside the GST regime until the GST Council reaches a consensus on the issue.
