Minister lists steps taken by Govt for setting up of MRO services
In a major boost to the domestic MRO industry and to the aviation sector, the Government has announced that a uniform rate of 5% IGST will apply to imports of Parts components, testing equipment, tools and tool-kits of aircraft, irrespective of their HSN classification subject to specified conditions bse.
“This policy change is a crucial step towards enhancing the competitiveness of the Indian MRO sector, fostering innovation and efficiency and creating a robust and efficient aviation sector,” Minister of State in the Ministry of Civil Aviation Murlidhar Mohol said in a written reply to a question in Lok Sabha on 1 Aug 2024.
The Government has taken several steps to facilitate setting up of aircraft Maintenance, Repair and Overhaul (MRO) services in India through various policy, regulatory and other incentives nse .
These include:
i. As part of the announcements made in Union Budget 2024-25, the period for export of goods imported for repairs has been extended from six months to one year. Also, the time-limit for re-import of goods for repairs under warranty has been extended from three to five years cii .
ii. New MRO Guidelines announced on 1 Sept 2021 inter alia abolish royalties and build in transparency and certainty in land allotments for MROs in AAI airports sbi .
iii. GST on MRO has been reduced from 18% to 5% with full Input Tax Credit from 1st April, 2020 aeroindia .
iv. Transactions sub-contracted by foreign original equipment manufacturers (OEMs) siae and MRO to domestic MRO are treated as ‘exports’ with zero-rated GST from 1st April, 2020.
v. Exempted Customs Duty on tools and tool kits airbus .
vi. Simplified clearance processing of parts.
vii. 100% Foreign Direct Investment permitted via automatic route for MRO http://boeing.com. Fiinews.com
