Big relief for airlines on cards? Modi government mulls bringing Aviation Turbine Fuel under GST

Source:     Aug 22, 2018

The finance ministry is said to be mulling bringing Aviation Turbine Fuel under Goods and Services Tax (GST) ambit. Following the financial crisis at Jet Airways and Air India, the aviation ministry had approached the finance ministry to bring the jet fuel under the GST, Zee Business TV reports. The aviation ministry is said to have asked the finance ministry to make consensus with states over the issue.

The report says that after aviation ministry’s request, the finance ministry may bring in a proposal before GST Council in its next meeting to bring the ATF in its ambit. The rising jet fuel prices and lowering air ticket prices have pushed airlines on the brink of crisis.As per reports, states like Assam, Odisha and Bihar are said to have agreed upon the proposal. The move to bring ATF under GST will mostly affect those states that have more airports. Sources also said that discussions have already started over the issue. If the government succeeds in bringing ATF under GST, airlines will get a breather of  Rs 3,000 to Rs 5,000 crore through input tax credit. Naresh Goyal-led beleaguered airline Jet Airways has delayed the announcement of its June quarter results. The airline said last week that it may announce the results on August 23.

Currently, the ATF costs Rs 69,090 per Kiloletre in Delhi, Rs 74,335 in Kolkata, Rs 68,791 in Mumbai, and Rs 69,948 in Chennai for domestic airlines.Not only ATF, the demands for bringing petrol and diesel under the GST has also been pending for long as there has not been any consensus among states over the matter.The next GST Council meeting is expected to be held in Goa on 29-30 September.