India has introduced a uniform 5% tax on all imports of aircraft components and engine parts, Civil Aviation Minister Kinijrapu Rammohan Naidu announced on Monday. This new rate, effective immediately, replaces the previous tax rates that ranged from 5% to 28%.
The uniform tax rate was proposed by India’s Goods and Services Tax (GST) Council in June. It applies to imports of aircraft parts, components, testing equipment, tools, and tool-kits.
Minister Naidu highlighted that the change was necessary to address the “challenges” posed by the varying tax rates, which will now be streamlined to benefit local maintenance, repair, and overhaul (MRO) businesses. “This new policy eliminates… disparities, simplifies the tax structure, and fosters growth in the MRO sector,” Naidu stated.
This policy shift comes at a crucial time as Indian airlines are placing record orders for new jets, anticipating a significant expansion in the country’s aviation market. India is one of the fastest-growing major aviation markets, with its aircraft fleet expected to more than double from 700 to over 1,500 by 2030.
Related Topics:
