Union Oil Minister Hardeep Singh Puri hinted at the possibility of Aviation Turbine Fuel (ATF) being included in the Goods and Services Tax (GST) during the India Energy Week 2025. This potential change in aviation fuel taxation was mentioned by Puri in a press conference, where he stated that the GST Council is actively considering bringing ATF under the GST regime. Currently, ATF is subject to an 11 per cent Central Excise duty, with a concessional 2 per cent rate for Regional Connectivity scheme routes, and varying VAT rates across different States.
The potential inclusion of ATF in the GST could benefit the civil aviation industry by reducing cascading taxes. Currently, ATF manufacturers are unable to avail input tax credits on GST paid on inputs, which ultimately increases the final cost. Puri emphasized that bringing ATF under GST would result in a win-win situation for all stakeholders, drawing upon his previous experience as the Civil Aviation Minister.
In addition to ATF, natural gas is also being considered for GST inclusion. States like Gujarat, Maharashtra, and Andhra Pradesh, which had reservations previously, are now recognizing the potential benefits of this move. While a definitive timeline was not provided, Puri indicated that progress is being made in this regard.
During the press conference, Puri also discussed the emerging energy supply from the western hemisphere, highlighting increased production from countries like Brazil, Argentina, Suriname, Guyana, Canada, and the U.S. He also addressed the issue of LPG marketing companies facing losses, mentioning the government’s previous compensation for under-recoveries and its continued support for the sector.
Puri further touched upon concerns related to gas distribution, particularly in the City Gas Distribution (CGD) and fertilizer sectors. He reassured that the government prioritizes both sectors and predicted that by 2026, there would be an abundance of reasonably priced gas available in the market.
On the international front, Puri highlighted India’s energy partnerships, including a recent deal with Qatar to extend their gas contract until 2048. He also mentioned potential collaborations with Russia, emphasizing the strong historical relationship and increased crude oil imports from the country.
The Minister’s comments came ahead of the India Energy Week 2025, which is positioned to be the second-largest global energy event. Scheduled to take place from February 11-14 in New Delhi, the event will feature a significant number of global delegates, speakers, and country pavilions, underscoring India’s growing importance in the global energy landscape.
With regards to geopolitical tensions, particularly involving Russia, Puri stressed the importance of diplomatic solutions, echoing Prime Minister Narendra Modi’s stance on prioritizing diplomacy over war.
