Union Civil Aviation Minister, Shri Kinjrapu Rammohan Naidu, announced today the implementation of a uniform IGST rate of 5% on all aircraft and aircraft engine parts, effective from July 15, 2024. This significant policy change aims to propel the domestic Maintenance, Repair, and Overhaul (MRO) industry, positioning India as a global aviation hub.

Commenting on this development, Shri Naidu stated, "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."

Shri Naidu emphasized the pivotal role of Prime Minister Shri Narendra Modi's leadership in implementing this change. "Under the guidance of Prime Minister Modi, we are committed to the Atma Nirbhar Bharat initiative. His support for transforming India into a leading aviation hub has been crucial in driving this policy forward," he added.

The Union Minister applauded the efforts of the Ministry of Civil Aviation, Ministry of Finance, and other stakeholders who worked diligently to achieve this policy adjustment. Recommended by the GST Council in its 53rd meeting on June 22, 2024, the uniform 5% IGST rate aims to reduce operational costs, resolve tax credit issues, and attract investment.

Highlighting the future prospects, Shri Rammohan Naidu stated, "Our vision is to transform India into a leading aviation hub. The Indian MRO industry is projected to become a $4 billion industry by 2030. This policy change is a crucial step towards building a strong ecosystem for MRO services, driving innovation, and ensuring sustainable growth."

The Ministry is confident that this move will significantly enhance the competitiveness of the Indian MRO sector, fostering innovation and efficiency, and creating a robust and efficient aviation sector.

Shri Naidu concluded by expressing optimism about the future of India's aviation industry, stating that the uniform IGST rate will not only simplify tax structures but also attract global investments, making India a preferred destination for MRO services. This initiative is set to drive the growth of the Indian aviation sector, ensuring it remains competitive on the global stage.