GST rate cut to 5% on MRO services for aviation industry

 







The Goods and Services Tax (GST) has been reduced to 5 percent from 18 percent on


maintenance, repair and overhaul (MRO) services for the aviation industry, the government said on Monday.


Minister of State in the Ministry of Civil Aviation V. K. Singh informed the Rajya Sabha on Monday about “several steps to meet the increasing demand in aviation sector in future”.


The issue of reduction of value added tax (VAT) on aviation turbine fuel has been taken up with the states and the union territories (UTs). Total 11 states/UTs that have reduced the VAT on jet fuel or ATF to below 5 per cent are -- Andaman and Nicobar Islands, Dadar and Nagar Haveli and Daman & Diu, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Ladakh, Madhya Pradesh, Tripura, Uttar Pradesh and Uttarakhand.


In his written reply to the House, the minister also said that the average number of the passenger carried in the pre-Covid financial year (2019-20) was around 4 lakh per day. “On March 6, 2022, domestic airlines in India carried around 3.7 lakh passengers. The number of daily air passengers may cross pre-COVID levels in a few months.”


“The Airports Authority of India (AAI) has taken up development of new and existing airports with a projected capital expenditure of around Rs 25,000 crore in next five years. This includes construction of new terminals, expansion and modification of existing terminals, expansion and/ or strengthening of existing runways, aprons, Airport Navigation Services (ANS) infrastructure, control towers and technical blocks etc,” the government said.


The public private partnership (PPP) airports at Delhi, Hyderabad and Bengaluru are undertaking major expansion projects of around Rs 30,000 crore by 2025. Additionally, Rs 36,000 crore has been planned for investment in the development of new Greenfield airports across the country under PPP mode, the minister said in response to a question.


Besides, the government of India has accorded 'in-principle' approval for setting up of 21 greenfield airports across the country, he added. “So far, eight greenfield airports namely, Sindhudurg and Shirdi in Maharashtra, Durgapur in West Bengal, Pakyong in Sikkim, Kannur in Kerala, Orvakal in Andhra Pradesh, Kalaburagi in Karnataka and Kushinagar in Uttar Pradesh have been operationalised,” the statement said.


Under Regional Connectivity Scheme (RCS) -- UdeDesh ka Aam Nagrik (UDAN), 403 routes connecting 65 airports (including 8 heliports and 2 water aerodromes) have been operationalised as on January 31, 2022.


The minister also informed that a conducive aircraft leasing and financing environment has been enabled and improvement in air navigation infrastructure at Indian airports is being carried out.



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