The proposal to include Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) met with resistance from several states during the 55th GST Council meeting held in Jaisalmer. Finance Minister Nirmala Sitharaman confirmed that no Group of Ministers (GoM) would be appointed and that no changes would be made to the current taxation of ATF.

Finance Ministers from multiple states expressed concerns over the potential revenue loss, as VAT on ATF is a significant source of income for them.

Telangana’s Deputy Chief Minister Mallu Bhatti Vikramarka stated, “Aviation Turbine Fuel (ATF) is already taxed under the VAT system. We all requested the council to maintain the status quo.”

The GST Council agreed to maintain the status quo on taxing ATF under VAT.

Bhatti, who also serves as the state’s Finance Minister, emphasised that states have limited revenue sources.

Industry experts, however, welcomed the debate on including ATF in GST.

Pratik Jain, Partner at PwC India, said, “Costs for airlines have been increasing, and ATF is one of the reasons for it. It’s good to see that there is at least a debate on including ATF in GST now.”

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