Union Civil Aviation Minister announces uniform IGST rate of 5 pc on aircraft parts
Union Civil Aviation Minister Kinjrapu Rammohan Naidu on Monday announced the implementation of a uniform Integrated Goods and Services Tax (IGST) rate of 5% on all aircraft engine parts.
ANI
Jul 15, 2024 23:56 IST
New Delhi [India], July 15 (ANI): Union Civil Aviation Minister Kinjrapu Rammohan Naidu on Monday announced the implementation of a uniform Integrated Goods and Services Tax (IGST) rate of 5 per cent on all aircraft and aircraft engine parts.
The move, which is effective from today, is expected to significantly boost the domestic Maintenance, Repair, and Overhaul (MRO) industry, positioning India as a global aviation hub, a press release by the Ministry of Civil Aviation said.
Highlighting the future prospects, Naidu stated, "Our vision is to transform India into a leading aviation hub. 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."
Commenting on this development, 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."
The Union Minister also highlighted the role of Prime Minister Narendra Modi's visionary leadership in making this change possible and said that under the guidance of PM Modi, they 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," Naidu added.
Naidu also applauded the efforts of the Ministry of Civil Aviation, the Ministry of Finance, and other stakeholders who worked to achieve this policy adjustment.
Recommended by the GST Council in its 53rd meeting on June 22, 2024, the uniform 5% IGST rate aims to reduce operational costs, resolve tax credit issues, and attract investment, the release added. (ANI)
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