India implements uniform IGST of 5% on all aircraft and aircraft engine parts

Union Civil Aviation Minister, Kinjrapu Rammohan Naidu has announced the implementation of a uniform IGST rate of 5% on all aircraft and aircraft engine parts, effective from 15th July 2024. This decision marks a significant milestone for the domestic Maintenance, Repair, and Overhaul (MRO) industry, aimed at making India a global aviation hub. Commenting on this development,Naidu noted that the introduction of a uniform 5% IGST rate on MRO items is a major boost for the aviation sector. Previously, the varying GST rates of 5%,12%, 18%, and 28% on aircraft components created challenges, including an inverted duty structure and GST accumulation in MRO accounts. This new policy eliminates these disparities, simplifies the tax structure, and fosters growth in the MRO sector."

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