Indian states Goa and Tamil Nadu reduce aviation fuel taxes

The governments of Goa and Tamil Nadu have implemented significant reductions in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) to bolster air connectivity and tourism.

In Goa, the VAT on ATF has been lowered to 7 per cent. This move has been welcomed by Union Civil Aviation Minister Ram Mohan Naidu, Air India, and IndiGo, with stakeholders noting it will make the state more accessible and support the aviation ecosystem.

In Tamil Nadu, the state government is reducing VAT at Chennai Airport from 29 per cent to 16 per cent. At all other airports within the state, the rate will drop from 29 per cent to 1 per cent. Additionally, for smaller aircraft with a maximum take-off mass below 40,000 kg operating outside Chennai, the tax will decrease from 5 per cent to 1 per cent. These changes, effective from November 1, 2026, aim to lower operating costs for airlines and encourage the expansion of regional flight services and new routes.