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Aviation sector: Steep cut in GST on MRO industry likely

Press Trust of India  |  New Delhi 

The is considering a steep reduction on the (GST) levied on the aviation maintenance, repair and overhaul (MRO) industry.

"We are trying to bring it down to a level of 5 per cent (from existing 18 per cent)," to the Ministry of Civil Aviation said, adding that they were in touch with the on the matter.

At present, the industry is taxed at 18 per cent, making aircraft servicing in costlier than other countries.

There is also a proposal under consideration to give a five-year tax exemption to newly-set up facilities, she said.

For existing MROs as well, there would be reduction in the GST burden.

Aggarwal was speaking at the Indo-French Defence and Aerospace Cooperation meet here today.

Addressing the session earlier, of Engineering Services H R Jagannath rued that the industry was being "heavily taxed".

In October last year, the MRO industry had made a representation to the demanding protection from the GST.

While the exemption from customs duty on imports of spares and other materials gave a big boost to the industry, the GST offset the competitive advantage it had gained.

The spent about USD 950 million in 2016-17 in aircraft and serving and only 10 per cent of this business came to Indian MRO companies.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, April 16 2018. 19:05 IST