Mumbai, April 29 -- The state government is considering a sharp cut in Value Added Tax (VAT) on aviation turbine fuel (ATF) to 1% from 18% at key airports, following a request from the Centre to ease rising airfares and support airlines. The move might cost the state exchequer nearly Rs.1,000 crore annual revenue loss. The proposal follows the Centre's push for a temporary 3 to 6 month reduction in states with high ATF taxes, as geopolitical tensions drive up ticket prices. Maharashtra, which currently levies 18% VAT at major airports, of Mumbai, Navi Mumbai and Pune, is among four states under focus, along with Tamil Nadu, (29%), West Bengal (25%) and Delhi (20%). Officials said the state already has a lower tax structure at smaller airports, it has 1% under the UDAN regional connectivity scheme covering six airports and 5% elsewhere, but a blanket cut would significantly impact finances. "If we decide to reduce it to 1%, the financial burden on the exchequer would be Rs.1000 crore. It would be a political decision to be taken by the police leadership," said an official from the finance department. Competition from neighbouring states is also a factor. Gujarat and Goa have reduced VAT to 1% and 8%, prompting concerns that airlines could prefer the neighbouring states for refuelling operations. Maharashtra had reduced ATF VAT from 25% to 18% in 2023 to remain competitive, but further cuts may now be needed as more states lower taxes to attract aviation traffic....