How airlines can cut costs: Suresh Prabhu makes the case for ATF under GST

Pitching for inclusion of Aviation Turbine Fuel (ATF) in the Goods and Services Tax (GST) regime, Union Minister Suresh Prabhu said the move will help cut the cost as airlines would get input tax credit. "We are very keen. I am pursuing this with the GST Council that it (ATF) is brought under the purview of the GST, then off course (we can get) input tax credit and as a result of which, cost of aviation will go down," Civil Aviation Minister Prabhu told PTI.

There is a demand from airlines for inclusion of Aviation Turbine Fuel in the new indirect tax regime. Civil Aviation Secretary R N Choubey too has recently stated that the matter will be taken up with the finance ministry as jet fuel prices have risen 40 per cent since January, 2017. Airlines could expect an annual relief of up to Rs 5,000 crore by way of input tax credit if the ATF is brought under the Goods and Services Tax.

The move could cushion them from the burden of increased jet fuel prices, besides providing relief to customers. During a presentation made by the airlines, they are understood to have maintained that the Centre could earn more than what it gets at present from ATF.