ATF likely to come under GST: Hardeep Puri

Petroleum and natural gas minister hints at balanced rate of taxation

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Geetanjali Minhas | January 25, 2025 | Mumbai


#taxation   #energy   #Aviation   #GST  
(File photo)
(File photo)

Aviation turbine fuel (ATF) is likely to be brought under the Goods and Services Tax (GST) in the near future, petroleum and natural gas minister Hardeep Singh Puri has said, signalling a potential change in aviation fuel taxation.
 

Speaking to the press in Mumbai on Friday ahead of India Energy Week 2025, Puri explained that the GST Council, which includes the union finance minister and state finance ministers, was actively considering bringing ATF under the GST regime.

“I am the line ministry. Taxation issues come from the finance ministry and GST Council. If  you ask me when, I would say sooner than later. Our sense out of the last GST meeting was that ATF is likely to come on soon,” he said.

Puri noted that several states, such as Gujarat, Maharashtra, and Andhra Pradesh, which previously expressed concerns, are now seeing the potential benefits of this shift.

Drawing from his experience as civil aviation minister earlier, Puri recalled that states were charging varied levels of GST ranging from 1% to 20% charged by some states. He added that he pursued with the chief ministers to charge lower VAT rates to get increased revenues as air fares being dynamic and flights being able to land anywhere, they would rather fuel in states where VAT rates was lower .

Currently, ATF attracts 11 percent central excise duty, with a concessional 2 % for regional connectivity scheme routes and varies in VAT rates across different States. ATF manufacturers cannot avail input tax credits on GST which gets built into the final cost. “If you bring something under GST, you will not lose. In fact, it will be a win-win for you,” said the oil minister.

Petroleum products including petrol and diesel  are not yet part of the GST framework. Efforts to include these products have faced opposition from several states over the years.

Puri also said that adding that bringing natural gas under GST is also under consideration.

Addressing other energy-related topics he said there is the abundant energy supply coming from countries like Brazil, Argentina, Suriname, Guyana, Canada, and the US inspite of cut back from some producers. He added that the government will continue to support loss making LPG marketing companies.
 

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