Centre Praises Tamil Nadu Fuel Tax Cut to Boost Air Travel

Tamil Nadu has slashed value-added tax on aviation turbine fuel at Chennai airport to sixteen percent from twenty-nine percent, while cutting the rate to one percent at all other airports in the state. Union civil aviation minister Ram Mohan Naidu welcomed the move and thanked Tamil Nadu Chief Minister C Joseph Vijay for the initiative.

Reactions And Goa Move

Naidu stated that teamwork between the central and state governments is essential to make flying cheaper for passengers. This announcement follows a similar move by Goa, where the government lowered its tax on jet fuel to seven percent under Chief Minister Pramod Sawant. Major carriers Air India and IndiGo both praised the Goa tax reduction for supporting tourism and connectivity.

Context

State governments control tax rates on aviation fuel because the product remains outside the national goods and services tax system. High state taxes have historically added heavy financial pressure to airline operating costs across the country.