GST cut to 5 per cent on domestic MRO services to boost aviation sector

The government has reduced the Goods and Services Tax (GST) rate on domestic maintenance, repair, and overhaul (MRO) services to 5 per cent from 18 per cent in order to support the aviation sector, Minister of State for Civil Aviation General (Retd) V K Singh said on Monday.

In a written reply to a question in the Rajya Sabha, Singh said the government has taken several steps to meet the increasing demand in the aviation sector in the future.

"Goods and Services Tax (GST) rate has been reduced from 18 per cent to 5 per cent for domestic Maintenance, Repair and Overhaul (MRO) services," the minister said.

In the written reply, the minister noted that the average number of passenger carried in the pre-COVID financial year (2019-20) was around 4 lakh per day. On 6th March 2022, domestic airlines in India carried around 3.7 lakh passengers.

"The number of daily air passengers may cross pre-COVID levels in a few months," he said.

The minister said the central government has taken up the issue of reduction of Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) with the states and the union territories.

Eleven States/UTs have reduced the VAT on ATF to below 5 per cent. These States/UTs include Andaman & Nicobar Islands, Dadar & Nagar Haveli and Daman & Diu, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Ladakh, Madhya Pradesh, Tripura, Uttar Pradesh and Uttarakhand.

The minister noted that the Government of India has accorded 'in-principle' approval for setting up of 21 greenfield airports across the country. So far, eight greenfield airports namely, Sindhudurg and Shirdi in Maharashtra, Durgapur in West Bengal, Pakyong in Sikkim, Kannur in Kerala, Orvakal in Andhra Pradesh, Kalaburagi in Karnataka and Kushinagar in Uttar Pradesh have been operationalised.

( With inputs from ANI )

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