Kerala govt to slash tax on aviation fuel to 5% for domestic airlines

The Kerala government will slash the tax on aviation fuel to 5 per cent from the current 28.75 per cent for domestic airlines, state Finance Minister T.M Thomas Isaac said.

Isaac made the significant announcement in the assembly during the discussion on the state budget for 2019-20.

"The tax on ATF will be reduced to 5 per cent from the existing 28.75 per cent for domestic airlines operating service from the state airports. A revenue loss of Rs 100 crore is expected through this," he said.

Aviation fuel accounts for a major portion of operating cost for airlines.

Not only airports under the UDAN (regional connectivity scheme), but non-UDAN airports would also get the new tax breather, Isaac said.

The tax cut is expected to benefit three international airports- Thiruvananthapuram, Kochi and Karipur in the state as the LDF government had already decided to levy only 1 per cent fuel tax from airlines operating service from the newly commissioned Kannur airport.