Prospects of air travel becoming more affordable continue to remain slim, with state governments once again deferring a decision on reducing sales tax on aviation turbine fuel (ATF). States have asked the Centre to provide a detailed explanation on how ATF price is fixed before they can take up the issue. However, informed sources hinted that states were unlikely to take a favourable decision on the matter even then.

“We will discuss the issue (sales tax on ATF) at the value-added tax (VAT) panel’s next meeting in Srinagar on June 21-23 after getting full details of price fixation of ATF from the concerned ministry,” chairman of empowered group of state finance ministers on VAT, Asim Dasgupta, said after the group met today. But sources said that state governments are “not amenable” to losing revenues accruing from taxes on ATF, and are unlikely to give in to the Centre’s demand of reducing it to a uniform three per cent from the current 4 to 33 per cent. “Today, states have conceded to reduce taxes on petrol and diesel and cutting VAT on LUG. So it’s very unlikely that they will also give in to the demand to cut sales tax on ATF since it will really increase their financial burden,” a state finance minister who attended today’s meeting told The Indian Express.