← Concept Library · Economy
Economy GS 3 In the news 3 times

Aviation Turbine Fuel (ATF)

Pricing Structure and Government Taxes

ATF is classified as a petroleum product but, unlike petrol and diesel, it remains outside the GST framework. Its pricing is determined by international crude oil prices plus a multi-layered tax structure imposed by both the central and state governments, making Indian ATF prices among the highest globally on a relative basis. This tax burden is a structural competitive disadvantage for Indian carriers compared to airlines operating in countries with lower ATF taxes.

Key details
  • ATF pricing components in India: Import duty on crude (20%), excise duty (8%), customs duty (5%), state VAT (16–30%, varies by state), throughput charges, and marketing margin by OMCs (21%).
  • Central government measure: Excise duty on ATF is set at 2% under UDAN-related exemptions for regional routes; the general rate is higher.
  • State VAT disparity: Some states levy up to 30% VAT on ATF — a major cost escalation point; states with aviation hubs like Maharashtra and Delhi have been urged to reduce VAT.
  • ATF as % of operating costs: 35–40% of total operating expenses for Indian carriers — making it the single largest cost component.
  • March 2026 ATF price: ₹96,638 per kiloliter (up 6% from February 2026).
In the news

● Tracked since March 11, 2026 · last seen March 27, 2026 · updates as the daily brief publishes

Related concepts
See it in today’s brief. Daily current affairs with every static concept explained in place.
Read the daily brief