Aviation Turbine Fuel to fall under GST, could reduce air ticket prices

​In a latest development, it is being now considered to include Aviation Turbine Fuel (ATF) and natural gas in Goods and Services Tax (GST). These two would be the first petro products to be included in the GST. Sources close to the Ministry of Petroleum have said that the ministry has placed a request for the inclusion of ATF in the new indirect tax system. Currently, the request is under review, and the next meeting of the GST Council is in January.
During the initial launch of the GST scheme, the centre had excluded five petroleum products, namely, diesel, ATF, natural gas, petrol, and crude oil. This was done so as to get the support of all the Indian states.
A Finance Ministry official involved in the process said in a statement, “ATF would be the first among petro products still outside GST (to come under the indirect tax regime). Inclusion of natural gas could be next or may be done simultaneously with ATF.”

Now Airlines would be able to take input tax credit on the GST paid (if and when implemented), and this would then bring down the effective cost. Also, GST on natural gas would help to save tax burden for oil companies such as IOC, BPCL, and ONGC. It is further being speculated that ATF price would reduce if GST is levied at 18 percent. This could lead to lower costs of air tickets, therefore benefitting travellers. In fact corporate travellers would be able to claim credit on GST paid on air travel.