The government on Wednesday reduced the excise duty on Aviation Turbine Fuel (ATF) or jet fuel to 11 percent from 14 percent earlier. The move will help airlines to keep airfares under check and reduce financial pressure.

Earlier, CNBC-TV18 reported the finance ministry has submitted a proposal to the election commission (EC) to cut excise duty on ATF from 14 percent to 8 percent.

The government had to seek EC's permission to carry out this measure, as the model code of conduct is currently being implemented in four states due to assembly elections.

Since 2014, the excise duty on ATF has been 14 percent, up from 8 percent earlier.

Last month, in an attempt to reduce current account deficit, the government had increased duties on 19 items including ATF. The customs duty on ATF was increased to 5 percent from zero.

There won't be a big change in estimates due to this excise duty cut because of depreciation in the rupee, said Mayur Milak of Indianivesh.

“Our initial estimate suggested that if the government take away the entire duty, there could have an impact of Rs 5,500-6000 crore," he said. "With only 3 percent cut there is hardly an impact but a step in the right direction.”

First Published:Oct 10, 2018 8:37 PM IST