Govt cuts GST on aircraft, engine parts to 5 pc

The government has implemented a uniform IGST rate of five percent on all aircraft and aircraft engine parts from Monday. Civil Aviation Minister Kinjrapu Rammohan Naidu has said that varying GST rates of Five, Twelve, Eighteen and 28 percent on aircraft components previously created challenges, including an inverted duty structure and GST accumulation in Maintenance, Repair, and Overhaul (MRO) accounts. He said the new policy will eliminate these disparities, simplify the tax structure, and foster growth in the MRO sector.
Calling policy change a crucial step towards ensuring sustainable growth and building a strong ecosystem for MRO services, Naidu also said that the government’s vision is to transform India into a leading aviation hub. He added that Indian MRO industry is projected to become a four-billion-dollar industry by 2030.The Civil aviation Ministry said the the uniform Five percent IGST rate aims to reduce operational costs, resolve tax credit issues, and attract investment. The ministry expressed confidence in the move saying it will significantly enhance the competitiveness of the Indian MRO sector, fostering innovation and efficiency, and creating a robust and efficient aviation sector.