The Delhi government has drastically reduced the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 25% to 7% for an initial period of six months. Approved during a cabinet meeting chaired by Chief Minister Rekha Gupta, the strategic intervention is designed to shield the airline industry from soaring global jet fuel expenses, largely driven by ongoing geopolitical tensions and energy supply disruptions in West Asia.
Because jet fuel constitutes nearly 35% to 40% of an airline’s total operational expenditures, this aggressive 18-percentage-point cut is expected to lower effective refueling costs at Indira Gandhi International Airport by roughly 15%. Coming closely on the heels of a similar tax reduction by Maharashtra, the policy aims to prevent steep summer airfare hikes, ease immediate cash flow pressures for major domestic carriers, and reinforce Delhi’s status as India’s leading aviation and transit hub.
Shreya Bansal is a reporter at TravTalk India, covering the travel and tourism industry. She brings a keen eye for emerging trends, trade developments, and the stories shaping the travel landscape. Through in-depth reporting and on-ground insights, she connects industry stakeholders with news that matters. Beyond travel, Shreya has a growing interest in the premium lifestyle space, particularly the world of fine jewellery and is eager to explore the craftsmanship, culture, and commerce that define luxury living.