States not to review sales tax on jet fuel

States will not review the current sales tax rates on jet fuel as of now, even as the troubled aviation industry demanded reduction in the levy.

"The mood of states is not to review the (sales tax) rates of ATF," Value Added Tax (VAT) panel Chairman Asim Dasgupta told reporters when asked whether states will lower sales tax rates on jet fuel as global crude prices have come down drastically.

Dasgupta said states have asked the Centre certain questions on Aviation Turbine Fuel (ATF), but have not got a response so far.

He said states also do not want the centre to bring ATF in the declared goods category which will bind the states to levy sales tax on jet fuel up to 4 per cent only.

Sales tax on ATF vary widely among states. The aviation industry is demanding a cut in the sales tax rates on jet fuel which constitute 40 per cent of their operation costs.

Dasgupta was talking to reporters after the empowered committee of state finance minister on VAT held a meeting to discuss the broad contours of the proposed Goods and Services Tax.

Dasgupta said the meeting discussed the items which have to be covered under GST, but did not disclose the list of items and the rate of GST as some more meetings are to be held before the agreement on these issues are reached.