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GOI to implement equal 5% GST on all aircraft and engine parts to boost industry
Industry News- Jul 16,24
The uniform tax rate is expected to reduce operational costs, resolve tax credit issues, and attract investment in the MRO sector.
In a significant move to boost India's Maintenance, Repair, and Overhaul (MRO) industry, the government has implemented a uniform IGST rate of 5% on all aircraft and aircraft engine parts, effective from July 15. This announcement was made by Union Civil Aviation Minister Kinjrapu Rammohan Naidu.
The Civil Aviation Ministry emphasised that this decision marks a milestone in making India a global aviation hub. The uniform tax rate is expected to reduce operational costs, resolve tax credit issues, and attract investment in the MRO sector.
"The introduction of a uniform 5% IGST rate on MRO items is a major boost for the aviation sector. Previously, varying GST rates of 5%, 12%, 18%, and 28% on aircraft components created challenges, including an inverted duty structure and GST accumulation in MRO accounts. This new policy eliminates these disparities, simplifies the tax structure, and fosters growth in the MRO sector," Naidu stated.
Minister Naidu also highlighted the government's commitment to the Atma Nirbhar Bharat initiative under Prime Minister Modi's leadership, which has been pivotal in advancing this policy.
Looking ahead, the Indian MRO industry is projected to become a $4 billion industry by 2030. This policy change is a crucial step towards building a strong ecosystem for MRO services, driving innovation, and ensuring sustainable growth.
The ministry expressed confidence that this move will significantly enhance the competitiveness of the Indian MRO sector, fostering innovation and efficiency, and creating a robust and efficient aviation industry.
This policy change is set to transform India's MRO industry, making it a significant player in the global aviation market.
(Source: Business Today)
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