GMR group-run Delhi International Airport Limited has petitioned Delhi chief minister Arvind Kejriwal to reduce value added tax (VAT) on aviation turbine fuel to one per cent, fearing loss of business to upcoming Noida airport.

At present, jet fuel in Delhi is taxed at 25 per cent. Noida airport is situated in neighbouring Uttar Pradesh which levies one per cent tax.

The plea has been made by PHD chamber of commerce and industry on behalf of the airport. .

“For the first time after so many decades, National Capital Region will be going to have a second airport at Noida in the state of UP and they shall be eligible for one per cent of VAT on ATF [Aviation Turbine Fuel]. Unless it is matched at Delhi airport with one per cent VAT, Delhi airport will become uncompetitive forcing airlines to shifting to new airport at Noida,” said PHDCCI executive director Ranjeet Mehta.

Delhi airport which is the busiest airport in the country is a member of chamber’s civil aviation committee.

Noida airport is gearing for launch by end-2024. Construction of terminal and other facilities is underway. Noida airport is collaborating with airlines and service providers for technology and traffic. In November 2023, it tied up with IndiGo which will be the launch carrier at the airport. 

Nineteen states in the country have lowered VAT on jet fuel following Civil Aviation Minister Jyotiraditya Scindia’s intervention. Five states including Assam, Bihar, Delhi, Tamil Nadu and West Bengal levy tax at rates ranging from 23.65 per cent to 29 per cent.