Govt exempts excise duty on ATF for Indian carriers

New Delhi: The Finance Ministry has exempted domestic airlines running international flights from 11 per cent basic excise duty on ATF or jet fuel bought from oil marketing companies.

In a notification, the ministry said that ATF supplied as fuel to domestic carriers on international routes would continue to be exempted from basic excise duty from July 1.

Confusion arose on the leviability of the excise duty on domestic airlines for their foreign flights after the government on July 1 slapped a Rs 6 per litre special additional excise duty (SAED) or duty on the export of jet fuel.

Oil companies were of the view that with the levy of export duty, domestic carriers would be liable to pay 11 per cent basic excise duty for the Aviation Turbine Fuel (ATF) they purchase for running overseas flights.

The Finance Ministry's clarification that excise duty would not be applicable on domestic carriers for foreign flights brings them back at par with foreign airlines for which the fuel is exempt from duty as per the Chicago convention.