The Maharashtra state government is evaluating a significant reduction in Value Added Tax (VAT) on aviation turbine fuel (ATF) from 18% to 1% at major airports. This proposal comes in response to rising airfares and a request from the Central Government to ease the financial burden on airlines. If implemented, the tax cut could result in an annual revenue loss of nearly ₹1,000 crore (approximately $120 million USD) for the state treasury. Currently, Maharashtra's VAT is among the highest in India, with neighboring states like Gujarat and Goa already offering lower rates of 1% and 8%, respectively. The competition from these states is a significant factor in the decision-making process, as it may lead airlines to choose alternative refueling locations. In 2023, Maharashtra had already lowered its ATF VAT from 25% to 18% to remain competitive, but further reductions may be necessary as other states continue to attract aviation traffic with lower taxes.