In a bid to address the rising airfares driven by fluctuating global crude oil prices and the ongoing crisis in West Asia, the Maharashtra government has announced a significant reduction in the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 18% to 7%. This reduction, effective from May 14, 2023, will remain in place until November 14, 2026, and is expected to result in an annual revenue loss of approximately ₹550 crore to ₹600 crore for the state. The revised VAT rate will apply to domestic flight operations, while international flights will continue to be exempt from VAT on fuel. This decision aligns with the Centre's request for states to lower VAT rates to alleviate pressure on airlines and passengers. Currently, Maharashtra's VAT on ATF is among the highest in India, trailing only Tamil Nadu's 29% and West Bengal's 25%. The reduction is seen as a strategic move to enhance Maharashtra's competitiveness in the aviation sector, especially as neighboring states like Gujarat and Goa have already implemented lower VAT rates. Union Aviation Minister Ram Mohan Naidu and Union Commerce Minister Piyush Goyal both welcomed the decision, highlighting its potential benefits for airlines, exporters, and tourism.