Tamil Nadu cuts jet fuel VAT, seeks airline expansion at Chennai airport

The Tamil Nadu government's decision to slash Value Added Tax on jet fuel is expected to boost connectivity at Chennai International Airport, with airlines expressing willingness to enhance their operations from the hub.

Sources indicate that carriers have provided assurances to expand services following the state's reduction of VAT on aviation turbine fuel from 29 per cent to 16 per cent. The tax cut aims to make the airport more competitive and attract increased flight operations across domestic and international routes.

While the airlines have signalled commitment to strengthening their presence at Chennai airport, they have refrained from providing concrete timelines for rolling out new services. Industry observers suggest that the tax incentive could drive expansion in frequency on existing routes as well as launch of new destinations.

The move reflects the state government's broader strategy to position Chennai as a major aviation hub in South India, complementing efforts to improve airport infrastructure and operational efficiency. Tax concessions on aviation fuel have proven effective in other states in attracting airline investment and improving regional connectivity.

Chennai airport, already a significant hub for domestic and international air traffic, stands to benefit from increased competitive offerings as airlines seek to capitalise on the improved operational cost structure.