Chennai: The Central government has cut the factory gate tax on jet fuel to 11 per cent from 14 per cent, a move that would bring down fuel prices for the country’s ailing aviation industry. The government order said it was ‘satisfied that it is necessary in the public interest’.
Jet fuel prices this month hit their highest level since January 2014 as rising international oil prices and plummeting rupee value pushed rates.
Aviation turbine fuel (ATF) prices, which currently are cheaper than petrol and diesel in Delhi, have since July spiked up by 9.5 per cent. They have been on upswing since July last year, rising every month except in July. Jet fuel was priced at Rs 47,013 per kl in July last year and has risen by 58.6 per cent since then.
Just last month the government had raise customs duty on ATF and 18 other non-essential import items in a bid rein in currently account deficit and shore up the rupee.
Basic customs duty of 5 per cent was imposed on ATF. It previously attracted nil duty. This led to an increase of Rs 2,000 per kl in prices.
ATF like petrol and diesel is not covered by the Goods and Services Tax (GST) regime that on 1 July last year amalgamated 17 different central and State taxes.