In a curtain-raiser to the India Energy Week 2025 , Union Oil Minister Hardeep Singh Puri indicated that Aviation Turbine Fuel (ATF) is likely to be brought under the Goods and Services Tax (GST) in the near future, signalling a potential change in aviation fuel taxation.
In a press conference, Puri explained that the GST Council, which includes the Finance Minister and State finance Ministers, is actively considering bringing ATF under the GST regime. “Our sense out of the last GST meeting was that ATF is likely to come on soon,” he said. Currently, ATF attracts 11 per cent Central Excise duty, with a concessional 2 per cent rate for Regional Connectivity scheme routes, and varies in VAT rates across different States.
The potential GST inclusion could benefit the civil aviation industry by reducing cascading tax. Currently, ATF manufacturers cannot avail input tax credits on GST paid on inputs, which gets built into the final cost. “If you bring something under GST, you will not lose. In fact, it will be a win-win for you,” Puri noted, drawing from his previous experience as Civil Aviation Minister.
Alongside ATF, natural gas is also being considered for GST inclusion. States like Gujarat, Maharashtra, and Andhra Pradesh, which previously had reservations, are now seeing potential benefits. “They are more or less seeing the benefits of that,” Puri stated, though he refrained from providing a definitive timeline.
Puri addressed several other energy-related topics. He highlighted the abundant energy supply emerging from the western hemisphere, mentioning increased production from countries like Brazil, Argentina, Suriname, Guyana, Canada, and the U S. “More crude is coming onto the market, in spite of cutbacks from some producers,” he explained.
Regarding LPG marketing companies facing losses, Puri revealed that the government had previously compensated companies for under-recoveries. “Last time they had an under-recovery of 28,000 crore. We compensated them through the Finance Ministry for 22,000 crore,” he said, indicating a willingness to continue supporting the sector.
He also addressed concerns about gas distribution, particularly in the context of City Gas Distribution (CGD) and fertilizer sectors. “There is enough space for both,” Puri asserted, emphasising that the government prioritises both CGD and fertilizer gas distribution. He predicted that by 2026, there would be “no shortage of abundant and reasonably priced gas.”
On international relations, Puri discussed India’s energy partnerships, highlighting a recent deal with Qatar extending their gas contract by 20 years until 2048. He also touched upon potential collaborations with Russia, noting India’s strong historical relationship and current crude oil imports, which have increased from 0.2 per cent to 30 per cent.
The Minister’s remarks came ahead of the India Energy Week 2025, set to be the second-largest global energy event. Scheduled from February 11-14 in New Delhi, the event will feature over 70,000 global delegates, 500 speakers, and 10 country pavilions, underscoring India’s growing significance in the global energy landscape.
As for geopolitical tensions, particularly regarding Russia, Puri emphasised diplomatic solutions, quoting Prime Minister Narendra Modi’s consistent stance: “This is a time for diplomacy and not for war.”
