Air fares in the state of Maharashtra may come down as the state government may announce a cut in taxes on aviation turbine fuel (ATF) in its upcoming budget, civil aviation minister Ajit Singh hinted.

Mr. Singh said on Sunday that he had held many rounds of meetings with Maharashtra CM Prithviraj Chavan on bringing taxes on ATF down. He added that he expected the government to announce a cut in the taxes in the upcoming state budget.

Speaking on the topic, the minister said, "We can expect a decision on this in the state budget."

Maharashtra charges 25 per cent tax on ATF, which is considerably higher than 20 per cent being charged by Delhi. ATF accounts for more than 40 per cent of airlines' total costs.

Lowering of taxes on ATF will slash airlines' costs, and the benefit may eventually be passed on to passengers.

Maharashtra will also benefit from the potential move as lower taxes would attract more airlines to refuel in the state, generating more revenues for the state.

The minister also described the 49 per cent foreign direct investment (FDI) in aviation as the government's single most significant policy decision that would transform India's civil aviation sector.