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Gujarat slashes tax on aviation fuel news
05 May 2011

Ahmedabad: In a move guaranteed to further enhance the business-friendly image of the state and also boost the nascent aviation business, the government of Gujarat has sharply reduced tax on aviation fuel for flights operating within the state. The move is aimed at promoting aviation-related business within the state.

Value-added tax on aviation turbine fuel (ATF) has been slashed from 30% to 4% for all non-scheduled flights. The move comes within days of the state bringing in Capt Gopinath-led Deccan Charters to start an intra-state aviation service.

Capt Gopinath is a pioneering name in Indian aviation having birthed low cost travel in the country through his Air Deccan, which he eventually sold off to liquor baron Vijay Mallya.

The slash in ATF costs will allow corporates operating their own aircraft within the state to save up to 20% on fuel costs. Fuel cost constitutes around 40% of the total operating cost of an airline.

A heavily industrialised state, Gujarat is home to business groups like Adani, Reliance, Essar, United Phosphorous, Sterling, Electrotherm and the Tatas among others. All these business houses regularly use their own executive jets.

The move to slash ATF prices is likely to boost business travel and tourism within the state.

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Gujarat slashes tax on aviation fuel