Maharashtra Govt Cuts VAT on Jet Fuel From 25% To 18% In Budget 2023 Announcement

The Maharashtra government on Thursday announced to reduce value-added tax (VAT) on jet fuel, or aviation turbine fuel (ATF), from 25 per cent to 18 per cent in Mumbai, Pune and Raigad. The decision was announced by Maharashtra Deputy CM Devendra Fadnavis while presenting the state Budget 2023-24.

“I thank Maharashtra CM @mieknathshinde Ji & Depy CM @Dev_Fadnavis Ji for taking the progressive decision to reduce VAT on Air Turbine Fuel from 25 per cent to 18 per cent. In a scenario of high fuel prices, this step will prove to be a catalyst in our efforts to ramp up air connectivity,” Union Minister for Civil Aviation Jyotiraditya Scindia said in a tweet on Thursday.

In Maharashtra, except Mumbai, Pune and Raigad, VAT on ATF is 4 per cent. However, it was high at 25 per cent for Mumbai, Pune and Raigad. These cities account for considerable air traffic.

Scindia also said, “With this, Maharashtra joins the league of total 19 states/UTs that have rationalised VAT rates in the last 1.5 years. Alongside enhanced connectivity for Mumbai, Pune & Raigad, this will also make travel more affordable, and boost growth.”

Aviation turbine fuel constitutes about 40 per cent of the cost of airline operations.  On an average, states earn as much as Rs 3,000 crore a year from VAT.

Maharashtra Deputy Chief Minister Devendra Fadnavis, who is also the state Finance Minister, on Thursday presented the Eknath Shinde-led government’s first Budget for the year 2023-24 in the state Assembly.

During the budget presentation, Fadnavis said the outlay for farmers has been increased by Rs 6,900 crore and the coverage of the Mahatma Phule Jan Arogya scheme, a health insurance scheme of the government, has been raised from Rs 1.5 lakh to Rs 5 lakh.

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