After a uniform IGST rate, aviation sector seeks PLI scheme for component manufacturing
NEW DELHI: On Monday Civil Aviation Minister Kinjrapu Rammohan Naidu announced the implementation of a uniform Integrated Goods and Services Tax (IGST) rate of 5% on all aircraft and aircraft engine parts for the domestic aircraft maintenance, repair & overhaul (MRO) sector. In the upcoming Union Budget for 2024-25, industry stakeholders are seeking measures which will boost domestic aircraft component manufacturing.
The decision taken on Monday is aimed at boosting the domestic MRO sector which has for long struggled with an unfavourable tax structure which made them uncompetitive compared to their global peers.
“This move has been pivotal in addressing the previously varying GST rates of 5%, 12%, 18%, and 28% on aircraft components, along with the issues of inverted duty structure and GST accumulation in MRO accounts,” said Venkatesh Mudragalla, Co-founder, Jeh Aerospace, a manufacturer of precision aerospace and engine components.
“As we await the much anticipated Budget 2024, the industry is hopeful for similar progressive policies from the government that will reduce disparities, simplify the tax structure, and foster growth within the MRO sector,” said Mudragalla.
