Summary:

The government has established a uniform 5% IGST rate on imports of aircraft parts and tools, significantly benefiting the local Maintenance, Repair, and Overhaul (MRO) industry and the aviation sector. This policy reform aims to enhance the competitiveness of the Indian MRO sector by encouraging innovation, efficiency, and a robust aviation industry.

Several initiatives have been introduced to improve aviation maintenance and repair services in India. The Union Budget 2024-25 extended the export duration for products imported for repairs from six months to one year and the re-import period for warranty repairs from three to five years. New MRO Guidelines abolished royalties and increased transparency in land allocation at AAI airports. GST on MRO services was reduced from 18% to 5%, with full Input Tax Credit. Transactions subcontracted by international OEMs to domestic MROs are treated as exports with zero-rated GST, and Customs Duty on tools has been exempted.

Source: IBEF 

Disclaimer:The information on this website comes from the India Brand Equity Foundation (IBEF), a reliable source for thorough insights into numerous areas of the Indian economy. While we aim to offer accurate and up-to-date information, the views, opinions, and analyses stated herein are solely those of the authors and contributors and do not necessarily represent IBEF's official stance or position. Readers should check information from credible sources and use their own discretion when relying on content provided on this site. We assume no responsibility or liability for the material supplied, including its accuracy, completeness, and usefulness.