Team Goemkarponn
PANAJI: Goa’s decision to halve Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 15 per cent to 7 per cent is expected to ease airlines’ operating costs and strengthen air connectivity to the state, though passengers may not see an immediate reduction in airfares, the Travel and Tourism Association of Goa (TTAG) said on Tuesday.
Welcoming the revised tax rate, which came into effect on October 24, TTAG thanked the state government for the initiative, stating that lower fuel costs could make airline operations more economically viable and support Goa’s tourism-dependent economy.
In a statement, the association said aviation fuel accounts for a significant share of airline operating expenses, making the tax reduction a potential relief for carriers refuelling in Goa.
TTAG said improved cost conditions could help airlines sustain and expand services to the state, which depends heavily on air connectivity to attract domestic and international tourists.
“As a premier domestic and international holiday destination, Goa relies heavily on accessible air travel. Reducing fuel burdens helps make flying to the state more economically viable, supporting hotels, resorts, tour operators, and local businesses,” the association said.
The tourism body also pointed to the possibility of increased flight frequencies and new routes, stating that lower fuel overheads could encourage airlines to expand operations or maintain existing services to Goa’s airports.
However, TTAG cautioned that the reduction in ATF VAT may not immediately translate into cheaper air tickets. Airfares are influenced by several factors, including global crude oil price fluctuations, fuel costs, demand and advance-booking patterns.
While the tax cut could offer longer-term benefits to the travel and tourism ecosystem, airlines have not indicated an immediate reduction in ticket prices, the association said.
Goa’s decision follows similar VAT reductions on aviation turbine fuel by other states, including Delhi, Maharashtra and Tamil Nadu, where revised rates vary from 7 per cent to 16 per cent.
The reduction is expected to improve the operating environment for airlines serving Goa and support the state’s efforts to strengthen air connectivity, a key factor in sustaining tourist arrivals and business activity across the tourism sector.
