In a bid to give relief to the aviation industry, the government has slashed the excise duty on aviation turbine fuel (ATF) to 11% from 14% earlier. This comes almost a week after the government announced a cut in excise duty of petrol and diesel by Rs 1.50 per litre. As per the Revenue Department notification, the duty change would come into force with effect from the October 11, 2018.
Jet fuel prices during October 2018 hit their highest level since January 2014 as rising international oil prices and plummeting rupee value pushed rates. The fuel in Delhi currently costs Rs 74,567 per kilolitre (Rs 74.56 per litre) and in Mumbai, it is priced at Rs 74,177 per kilolitre. The aviation industry has been seeking lower taxes to help offset the impact of high oil prices.
Notably, the aviation ministry has been pitching for inclusion of ATF in the goods and services tax (GST) regime, stating that the move will help cut the cost as airlines would get input tax credit. Airlines, which are making a persistent demand for this, maintain that they would get an annual relief of Rs 3,000 to Rs 5,000 crore if ATF is included in GST.