Ministries at work to thrash out aviation revamp with tax cuts, regulatory relaxations: Report

A key focus of the package will be reduced user charges, route optimization, and regulatory relaxations.

The government is working on a comprehensive package for the aviation sector that would reduce user fees, ease regulations, and offer tax concessions, according to a report by Mint.

The initiative, led by federal think tank Niti Aayog, involves consultations with several ministries, including aviation, commerce, finance, home, petroleum, and environment, the report cited government officials familiar with the development.

The report added that the civil aviation ministry is focusing on regulatory relaxations and route allocations, while the commerce ministry aims to align the package with India’s trade goals and attract foreign investment. The finance ministry is expected to review tax concessions, especially concerning aviation turbine fuel (ATF), while the petroleum ministry is engaging with states to rationalise value-added tax (VAT) on jet fuel.

The environment ministry will ensure that the package meets sustainability norms, and the home ministry will work on improving immigration and security protocols. Additionally, state governments are expected to support the development of regional airports, sources told Mint.

An official announcement on the package is expected in the coming months, with the Niti Aayog providing policy guidance to ensure economic viability. Several rounds of inter-ministerial discussions have taken place, and another round of talks is planned soon.

Other proposals under consideration include minimising procedural delays in permitting new airlines, aircraft acquisition, and route additions. The package may also ease restrictions on hiring foreign pilots, as well as relax norms on digital ticketing, security checks, and customer services to enhance passenger convenience.

A key focus of the package will be reduced user charges, route optimisation, and regulatory relaxations. Officials also stressed on the importance of rationalising the ATF prices, as current rates are still higher than global standards. Consultations with states and oil marketing companies are underway to align prices, the official said.

Queries emailed by Mint to spokespersons of the Niti Aayog and the ministries of aviation, commerce, finance, petroleum, home, and environment remained unanswered, and Moneycontrol could not independently verify the details of the report.