Chennai/Delhi/Hyderabad, Oct 24 (Maxim News): Tamil Nadu Chief Minister C. Joseph Vijay has received praise from Union Civil Aviation Minister K. Ram Mohan Naidu after the state government reduced value-added tax (VAT) on aviation turbine fuel (ATF).
The Tamil Nadu government has reduced VAT on aviation fuel at Chennai Airport from 29% to 16%. At other airports across the state, the rate has been cut from 29% to 1%.
The revised rates will take effect on November 1, 2026, and remain in force until October 31, 2027. The state government notified the changes through its Commercial Taxes and Registration Department.
Union Minister Ram Mohan Naidu welcomed the decision and thanked Vijay for the initiative. He said cooperation between the Centre and state governments was essential to making air travel more affordable.
Tamil Nadu Aviation Fuel VAT Cut to Boost Connectivity
The revised tax structure also provides relief for smaller scheduled aircraft operating outside Chennai. For aircraft with a maximum take-off mass below 40,000 kilograms, VAT on aviation fuel has been reduced from 5% to 1%.
The move aims to reduce airlines’ operating costs and improve the commercial viability of regional routes. It could also encourage airlines to introduce new services or increase flight frequencies at airports beyond Chennai.
Aviation turbine fuel accounts for a significant share of airline operating expenses. Therefore, lower taxes could ease some of the financial pressure on carriers.
However, the reduction does not guarantee an immediate fall in airfares. Any passenger benefit will depend on airlines’ pricing decisions, fuel costs and operating conditions.
Tamil Nadu Industries Minister S. Keerthana said the decision was intended to strengthen regional airport connectivity and support economic growth.
The revised rates bring Tamil Nadu closer to states that already levy lower taxes on aviation fuel. The government expects the measure to improve regional connectivity and support tourism, trade and business travel.
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