The recent Indian budget in February announced that 14 per cent excise duty will be levied on aviation turbine fuel (ATF) from April 1.
This came as a shock to the industry who welcomed the recent drop in ATF prices.
The duty hike, from eight per cent, means potentially higher airline ticket price for India’s budget carriers.
Amber Dubey, partner and head of aerospace and defence at global consultancy KPMG said:
“Increase in excise duty on ATF will make the raw material costlier. At a time when ATF in India is 60-70 per cent costlier than global ATF prices it goes against the government’s stated objective to make flying affordable for the masses.”