Goa Slashes VAT on Aviation Turbine Fuel to 7% from October 24, 2026

The Goa government has reduced value-added tax (VAT) on aviation turbine fuel (ATF) from 15% to 7%, as per news reports.  

The new rate came into effect on October 24, 2026, following a notification issued by the state’s Department of Finance (Revenue and Control) on October 23, 2026. 

The previous 15% rate had been set in March 2024. The latest change cuts the tax by eight percentage points for the category of aviation fuel specified in the notification. 

Changes Under the Goa VAT Act 

The notification amends Schedule C of the Goa Value Added Tax Act, 2005. It revises the entry at serial number two, setting VAT at 7% on “Aviation Turbine Fuel other than covered by entry (1) above”. 

The revised rate applies only to the category covered by this entry. The distinction between this fuel and the category listed under the preceding entry remains unchanged. 

ATF taxation varies across Indian states because VAT is levied at the state level. The rate charged affects the tax component of fuel purchases made by airlines at airports in each state. 

IndiGo Welcomes the Reduction 

IndiGo welcomed the decision in a post on X, thanking Goa Chief Minister Pramod Sawant. The airline said the reduction could help strengthen air connectivity and support the state’s tourism sector. 

It also urged other states to consider similar cuts, citing high aviation fuel costs. The airline said lower taxes on ATF could make air travel more accessible, but did not announce any change in fares following Goa’s decision. 

Effect on Airline Costs 

ATF is a major expense for airlines. Reducing VAT lowers the tax payable on fuel purchases covered by the revised rate in Goa. The actual savings for each airline will depend on the amount of fuel purchased under the applicable tax provision. 

Lower fuel taxes do not automatically lead to cheaper tickets. Airlines’ fares also depend on demand, competition and other operating costs. No fare changes were announced alongside the notification. 

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Conclusion 

Goa’s revised 7% VAT rate took effect on October 24, 2026, replacing the earlier 15% rate for the specified category of ATF. IndiGo has called on other states to consider similar reductions as fuel costs remain high. 

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