New Delhi: The Central government has announced the implementation of a 5 per cent uniform Integrated Goods and Services Tax (IGST) rate on all aircraft and aircraft engine parts to boost the industry. This decision marks a significant milestone for the domestic Maintenance, Repair, and Overhaul (MRO) industry, aimed at making India a global aviation hub, an official release said.
Earlier, IGST rates on all aircraft and engine parts were ranging from 5 per cent to 28 per cent.
'Major boost for aviation sector'
Commenting on this development, Union Civil Aviation Minister Kinjrapu Rammohan Naidu, said, "The introduction of a uniform 5 per cent IGST rate on MRO items is a major boost for the aviation sector. Previously, the varying GST rates of 5 per cent, 12 per cent, 18 per cent, and 28 per cent 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," he noted.
The Union Minister further emphasised the role of Prime Minister Narendra Modi's visionary leadership in making this change possible. "Under the guidance of Prime Minister Modi, we are committed to the Atmanirbhar Bharat initiative. His support for transforming India into a leading aviation hub has been crucial in driving this policy forward," he added.
The GST Council, in its 53rd meeting on June 22, had recommended the uniform 5 per cent IGST rate, the release said, adding that the move is aimed at reducing operational costs, resolving tax credit issues, and attracting investment.
MRO industry is projected to become USD 4 billion industry by 2030
"We are committed to the Atmanirbhar Bharat initiative. Prime Minister Narendra Modi's support for transforming India into a leading aviation hub has been crucial in driving this policy forward," the minister said.
Highlighting the future prospects, Naidu said that the government's vision is to transform India into a leading aviation hub, adding that the Indian MRO industry is projected to become a USD 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," Naidu emphasised.
The ministry is confident that this move will significantly enhance the competitiveness of the Indian MRO sector, fostering innovation and efficiency and creating a robust and efficient aviation sector, the release said.
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