Removal of customs duty, service tax on MRO works suggested

Civil Aviation Ministry has suggested removal of customs duty and service tax or a 10-year tax holiday on maintenance, repair and overhaul (MRO) works to promote aircraft engineering activities in India, Rajya Sabha was informed today.
While the government has not prepared any formal policy on MRO facilities, the constraints facing this sector have been identified in consultation with the stakeholders, Minister of State for Civil Aviation G M Siddeshwara said.
He was asked whether any policy had been formulated to help Indian carriers not to send their aircraft abroad for maintenance.
Siddeshwara said the ministry has suggested several steps to the Finance Ministry in this regard, including removal of service tax on MRO works or a 10-year service tax holiday and do away with customs duty on import of consumables and tool- kits used by MROs.

It has also urged state governments to remove VAT on spare parts sold by MROs and the Airports Authority of India to relax the "stringent requirement" of royalty charged on MRO revenues and identify areas at airports where MRO activities could be started.
The Finance Ministry has also been urged to simplify the procedures of custom clearance and procedures specifying time- limits to consume spare parts, the minister said.