In a significant development for the aviation sector, the upcoming 55th GST Council meeting is expected to deliberate on the possibility of bringing jet fuel (ATF) under the Goods and Services Tax (GST) regime ), according to sources.

Currently, ATF’s tax structure includes value added tax (VAT) and central excise, leading to a cascading effect on taxes, the sources added. The dual tax regime inflates costs for the aviation industry.

Sources further said that most of the inputs required for the production of ATF fall under GST, but the ATF itself remains outside its purview. This anomaly prevents manufacturers from availing input tax credit on GST paid on production inputs, thereby increasing operational costs.

Additionally, the inability to claim input tax credits results in input costs being included in the final ATF cost. This increases overall expenses for refineries and ultimately the aviation industry, posing an additional burden on airlines and passengers.

Bringing the ATF under the GST regime would resolve the issue of cascading taxes, thereby providing substantial relief to refineries.

#CNBCTV18Exclusive | #GSTAdvice likely to discuss the possibility of bringing #ATF below #GST diet.

View from GST Secretariat: #VAT an ATF includes central excise duties, leads to a cascade of taxes, sources to @TimsyJaipuria pic.twitter.com/N5dbNIJ46s

– CNBC-TV18 (@CNBCTV18Live) December 19, 2024