Minister of State for Civil Aviation Jayant Sinha urged Finance Minister Arun Jaitley to bring aviation turbine fuel (ATF) under the ambit of GST.
Despite being one of the fastest growing domestic aviation markets in the world, local carriers have been facing tough business conditions, especially with surging oil prices and depreciation of the rupee.
As players look to woo more passengers with cheap fares, airlines have not been fully able to increase ticket prices.
"The Ministry of Civil Aviation and Petroleum Ministry have asked the Ministry of Finance and all the states to consider bringing ATF under the GST framework. We would like that to happen. So we discussed that matter as well," Sinha told reporters after meeting Jaitley.
The final call, however, would be taken by the GST Council, he added.
ATF constitutes approximately 35-40 percent of operational cost of an airline in India.
The meeting was also attended by Finance Secretary Hasmukh Adhia and Civil Aviation Secretary R N Choubey.
The meeting was to discuss ways to lower input costs for airlines, Choubey said.