ATF to be Taxed under GST Soon, Oil Minister Hardeep Singh Puri hints
During a press briefing, Puri detailed that the GST Council, comprising the Finance Minister and State finance Ministers, is currently evaluating the integration of ATF into the GST framework
Union Oil Minister Hardeep Singh Puri, in the lead-up to India Energy Week 2025, suggested that Aviation Turbine Fuel ( ATF ) may soon be included under the Goods and Services Tax ( GST ), potentially altering the taxation structure for aviation fuel. He remarked, “Our sense out of the last GST meeting was that ATF is likely to come on soon.” At present, ATF is subjected to an 11...
Union Oil Minister Hardeep Singh Puri, in the lead-up to India Energy Week 2025, suggested that Aviation Turbine Fuel ( ATF ) may soon be included under the Goods and Services Tax ( GST ), potentially altering the taxation structure for aviation fuel. He remarked, “Our sense out of the last GST meeting was that ATF is likely to come on soon.”
At present, ATF is subjected to an 11 percent Central Excise duty, with a concessional 2 percent rate applied to Regional Connectivity scheme routes, alongside varying VAT rates across States. The inclusion of ATF under GST could offer relief to the civil aviation sector by mitigating the cascading effect of taxes.
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Currently, ATF manufacturers face challenges as they are unable to claim input tax credits on GST paid for inputs, leading to increased costs. Reflecting on his tenure as Civil Aviation Minister, Puri commented, “If you bring something under GST, you will not lose. In fact, it will be a win-win for you.”
Discussions also encompass the possibility of bringing natural gas under the GST ambit. States such as Gujarat, Maharashtra, and Andhra Pradesh, which previously held reservations, are beginning to recognize the potential advantages. Puri observed, “They are more or less seeing the benefits of that,” though he stopped short of offering a concrete timeline.
Puri addressed broader energy matters, noting an uptick in energy supplies from the western hemisphere, highlighting the contributions from Brazil, Argentina, Suriname, Guyana, Canada, and the U.S. “More crude is coming onto the market, in spite of cutbacks from some producers,” he noted.
In response to the financial struggles of LPG marketing companies, Puri confirmed that the government had previously provided compensation for under-recoveries. He stated, “Last time they had an under-recovery of 28,000 crore. We compensated them through the Finance Ministry for 22,000 crore,” indicating continued government support.
Addressing concerns related to City Gas Distribution ( CGD ) and fertilizer sectors, Puri assured, “There is enough space for both,” projecting an ample supply of affordable gas by 2026.
Regarding India’s energy diplomacy, Puri underscored a recent agreement with Qatar extending gas supplies until 2048 and discussed potential collaborations with Russia, emphasizing India's increased crude oil imports from 0.2 percent to 30 percent.
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These remarks come as India prepares for the upcoming India Energy Week 2025, set to be one of the largest global energy gatherings. The event, scheduled from February 11-14 in New Delhi, is expected to attract over 70,000 delegates, 500 speakers, and 10 country pavilions, showcasing India’s expanding role in the global energy arena.
Amid geopolitical concerns, especially regarding Russia, Puri reiterated Prime Minister Narendra Modi’s approach, emphasizing, “This is a time for diplomacy and not for war.”
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