Mumbai, Jul 7 (PTI) Air India, IndiGo and SpiceJet have asked the government to bring aviation turbine fuel under GST, emphasising that such a move will help in reducing the operating costs for the airlines.

States levy excise duty as well as Value Added Tax (VAT) on Aviation Turbine Fuel (ATF), which accounts for a significant chunk of an airline's operational costs.

The Federation of Indian Airlines (FIA), which represents Air India, IndiGo and SpiceJet, has said that Indian aviation sector is presently facing an extraordinary convergence of challenges, including those arising out of escalating geopolitical tensions from the West Asia conflict, airspace restrictions and rupee depreciation.

"Due to the prevailing circumstances, the fuel component has now escalated from 30-40 per cent to nearly 55 per cent - 60 per cent of operational cost, thereby creating financially unviable operating conditions for Indian carriers," FIA said in a letter to the civil aviation ministry last month.

According to the grouping, airlines are simultaneously witnessing a sharp escalation in ancillary operational expenses, including revision in rates of polymers, petrochemicals, engineering materials, airport services, logistics, and other fuel linked inputs and services.

"Considering the extraordinary global circumstances and the fragile financial condition of the aviation sector, bringing ATF under the ambit of the GST with full ITC benefits assumes critical importance for Indian carriers," FIA said.

The grouping has urged the civil aviation ministry to support in taking up the matter with the relevant ministries and stakeholders for bringing ATF under the GST regime at 5 per cent with full ITC (Input Tax Credit) at the earliest possible opportunity. PTI IAS RAM MR

Aviation turbine fuel under GST sought to cut airline operating costs and improve financial viability. Airlines have sought inclusion of aviation turbine fuel under the GST regime to reduce operating costs and ease financial pressure on Indian carriers. The request points to the present tax structure under which States levy excise duty and VAT on ATF, making fuel a major component of airline operating expenses. The industry body urges that ATF be brought under GST at 5 per cent with full Input Tax Credit, and asks the civil aviation ministry to support engagement with the relevant ministries and stakeholders.