NEW DELHI: Union aviation minister Kinjrapu Rammohan Naidu Monday announced implementation of a uniform
IGST rate
of 5% on all aircraft and aircraft engine parts, effective July 15, 2024, providing a big boost to India's maintenance, repair, and overhaul (MRO) industry. The GST Council in its 53rd meeting on June 22, 2024, had recommended a uniform 5% IGST rate aims to reduce operational costs, resolve tax credit issues, and attract investment to the country in a bid to make India a leading global aviation hub.
Naidu said: "The introduction of a uniform 5% IGST rate on MRO items is a major boost for the aviation sector.
Previously, the 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."
"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," Naidu said.
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