In a major relief to airline companies, the Centre on Wednesday slashed excise duty on Aviation Turbine Fuel (ATF) to 11 per cent from 14 per cent.
A notification issued from the Finance Ministry's revenue department stated that the revised duty would be effective from October 11.
In March 2014, the government had increased excise duty on jet fuel from eight per cent to 14 per cent.
The decision to cut jet fuel tax comes at the time when airlines are reeling under pressure due to high jet fuel prices since January 2014 and a weaker rupee.
The fuel in Delhi currently costs Rs 74,567 per kilolitre and in Mumbai, it is being sold at Rs 74,177 per kilolitre.
Last week, the government had cut excise duty on petrol and diesel by Rs 2.50 per litre and asked state-owned oil firms to subsidise the fuel by another Re 2.5 a litre. The move was followed by the Bharatiya Janata Party (BJP)-ruled states, giving a relief of about Rs 5 per litre to the customers.