After slashing VAT on jet fuel, Tamil Nadu government asks airlines to add more services from Chennai airport

26 Oct 2026, 10:27 PM 4 min read

After slashing VAT on jet fuel, Tamil Nadu government asks airlines to add more services from Chennai airport PORT CALL left A source said that one of the largest airline operators at Chennai airport has promised to increase the number of flights by nearly 25 per cent and another prominent operator by eight per cent. B. Velankanni Raj The Hindu VELANKANNI RAJ B CHENNAI, TAMIL NADU, 07/06/2024: A view of flight landing at the Chennai Airport on Friday.

Heavy rain last night delayed some flight arrivals and departures early in the morning.Photo: Velankanni Raj B/ The Hindu Sources said that the airlines have assured to expand services after the State government reduced the VAT on jet fuel from 29 per cent to 16 per cent; the airlines, however, have not given a timeframe for the implementation CHENNAI In a bid to boost connectivity, the Tamil Nadu government has reached out to various airlines to increase the number of flights and serve more destinations, both domestic and abroad from Chennai airport.

In recent times, quite a few meetings were held between the Tamil Nadu government, AAI and the airlines, and whenever the government had asked them to add more flights and expand connectivity, one of the primary demands of the airlines was that Value Added Tax (VAT) on aviation turbine fuel (ATF) be decreased. As the jet fuel accounts to a considerable part of an airline’s operating cost, the airlines, AAI and the Ministry of Civil Aviation too had been pushing for it for a while now.

Tamil Nadu cuts VAT rate on aviation turbine fuel at Chennai airport from 29% to 16% Tamil Nadu cuts VAT rate on aviation turbine fuel at Chennai airport from 29% to 16% It has also reduced the VAT for scheduled airlines fuelling at airports other than Chennai from 29% to 1%. The rate has been reduced from 5% to 1% for scheduled airlines operating aircraft with a maximum take-off mass of less than 40,000 kg and fuelling at airports other than Chennai Tamil Nadu cuts VAT rate on aviation turbine fuel at Chennai airport from 29% to 16% storyline 1 After announcing the steep cut on the VAT on ATF at Chennai airport from 29 per cent to 16 per cent, sources said, the airlines were happy and have assured to expand further from Chennai airport.

“We have been constantly persuading them to connect more destinations. Now that VAT has been slashed, the airline representatives have agreed to add more flights. We hope to see a difference soon,” a source said. The government has requested one of the airlines for a direct flight to Japan from Chennai. Tamil Nadu cuts VAT rate on aviation turbine fuel at Chennai airport from 29% to 16% storyline 1 One of the largest airline operators at Chennai airport has promised to increase the number of flights by nearly 25 per cent and another prominent operator by eight per cent, another source said.

“But they have not promised a timeframe. There may not be an immediate impact in the increase in the number of flights at Chennai. We have to wait and see if there is an increase in the summer schedule,” the source added. Sources said, the State government must also work even more aggressively to create the demand by generating thousands of high value jobs. Some of the airlines also welcomed the decision to cut back the VAT on jet fuel.

IndiGo, Air India and Akasa Air welcomed the move to cut back the VAT on jet fuel. IndiGo, in a statement said: “We welcome the Government of Tamil Nadu’s decision to reduce VAT on Aviation Turbine Fuel (ATF) and extend our sincere appreciation to the Honourable Chief Minister, @TVKVijayHQ, for this progressive initiative. Such measures strengthen air connectivity, support the state’s tourism and economic growth, and contribute to a more robust aviation ecosystem in India.

We hope similar progressive initiatives will make air travel more accessible.“ Air India too said the reduction from 29% to 16% at Chennai Airport and to 1% at other airports in the State is a welcome step and will help lower operating costs and improve air connectivity.