The government has announced new incentives in the Budget 2024 to strengthen maintenance, repair, and overhaul (MRO) operations across India’s aviation and shipping sectors.
Budget 20204 announcement for Aviation & Shipping sectors
Finance Minister Nirmala Sitharaman mentioned in his Budget speech, ”To promote domestic aviation and boat & ship MRO, I propose to increase the period for the export of goods imported to one year from six months. Similarly, I put forward to extend the deadline for the re-import of goods for repairs which comes under warrant from three to five years.”
The government has earlier executed a uniform Integrated Goods and Services Tax (IGST) rate of 5% on every aircraft and the parts of aircraft engines. Before this change, IGST rates levied on these items used to vary from 5% to 28%.
The measures that are announced now are part of ongoing attempts to enhance MRO activities in the aviation sector as for now it has been outsourced internationally. India is considered to be one of the world’s largest-growing domestic aviation markets. On the contrary, the Civil Aviation Ministry budgetary allocation has been lessened to Rs 2357.14 crore for the current fiscal year. On the other hand, Rs 502 crore has been allocated for regional air connectivity for the same duration.
(With PTI inputs)