India gives a big boost to MRO industry with uniform 5% IGST on aircraft components
17 Jul 2024
India has started levying a uniform 5 per cent Integrated Goods and Services Tax (IGST) on aircraft parts, beginning 15 July, to boost domestic aircraft maintenance, repair, and overhaul (MRO) industry, so as to make India a global aviation hub.
Announcing this on Monday, union minister for civil aviation, Kinjrapu Rammohan Naidu, said the country is aiming to become a leading aviation hub with $4 billion MRO industry by 2030.
This decision marks a major relief to the MRO industry, which has previously been subjected to varying, and in some cases an inverted, duty structure. Aircraft components were subject to varying GST rates of 5 per cent,12 per cent, 18 per cent, and 28 per cent, depending on the product.
Elimination of duty disparities and simplification of the tax structure will foster growth of the MRO sector, which is projected to become a $4 billion industry by 2030m Naidu saidm adding that the policy shift is crucial to building a strong ecosystem for MRO services.
He said the policy shift was made possible with the visionary leadership of Prime Minister Narendra Modi and the joint efforts of the ministry of civil aviation, ministry of finance and other stakeholders.
