Airlines' body FIA urges govt to bring jet fuel under GST

Business To Business, New Delhi, 07^th July, 2026:    India's leading airlines—Air India, IndiGo and SpiceJet—have urged the government to bring Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) regime, arguing that the move would significantly reduce operating costs and improve the financial sustainability of the aviation sector.
The demand has been made by the Federation of Indian Airlines (FIA), the industry body representing the three carriers.
Currently, Aviation Turbine Fuel is subject to excise duty by the Centre and Value Added Tax (VAT) levied by individual states. Since fuel constitutes one of the largest components of an airline's operating expenses, the carriers believe that bringing ATF under GST would create a more uniform tax structure and help lower costs.
In its representation, the FIA said the Indian aviation industry is facing an unprecedented convergence of challenges, including rising geopolitical tensions stemming from the conflict in West Asia, restrictions on international airspace and the depreciation of the Indian rupee, all of which have increased operating expenses for airlines.
According to the industry body, rationalising the tax structure on ATF through the GST framework would improve cost efficiency, enhance the competitiveness of Indian carriers and support the long-term growth of the aviation sector.
The airlines have maintained that lower fuel costs could strengthen their financial position, enabling greater investment in network expansion, fleet modernisation and improved passenger services, while also contributing to the continued growth of India's civil aviation industry.
The proposal to bring ATF under GST has been a longstanding demand of the aviation sector, with industry stakeholders arguing that it would help create a more efficient and globally competitive operating environment for Indian airlines.