Tamil NaduSunday, 19 July 2026·The Hindu - Tamil Nadu
Tamil Nadu may cut ATF VAT from 29% as budget move to lower airline operating costs
Tamil Nadu is considering reducing the 29% VAT on aviation turbine fuel, a key cost driver for airlines, ahead of the State budget.
Key highlights
Direct fact
In July 2026, the Tamil Nadu government said it was contemplating a cut in the State VAT on Aviation Turbine Fuel (ATF), which is currently 29%, with the revised rate expected to be announced in the State budget.
Key specifics
- ATF VAT in Tamil Nadu is currently 29%.
- Andhra Pradesh charges 1% VAT on ATF, while Puducherry charges 14.5%.
- Telangana levies 16% and Karnataka levies 18% on ATF.
- Kerala charges 5% sales tax plus 1% cess, and its four airports include Thiruvananthapuram, Nedumbassery, Kannur and Kozhikode.
- Scheduled Indian operators spend about 40% to 45% of total operating expenses on aircraft fuel and oil.
Exam lens
TNPSC economy and State policy question: match the ATF tax rates of Tamil Nadu, Andhra Pradesh, Puducherry, Telangana and Karnataka; remember that ATF is a major airline operating cost and the State budget may announce the revised rate.