Bengaluru: Finance Minister Nirmala Sitharaman on Tuesday announced some incentives to bolster the growth of maintenance, repair and overhaul (MRO) activities in the aviation and shipping sectors.
"To promote domestic aviation and boat & ship MRO, I propose to extend the period for export of goods imported for repairs from six months to one year. In the same vein, I propose to extend the time-limit for re-import of goods for repairs under warranty from three to five years," Sitharaman said in her Union Budget speech.
"Changes with respect to enhancement of timelines of export/ re-import is a step towards creating India as a MRO hub. Eventually, the idea is to attract foreign shipping and aviation players for repairs in India", said Samir Kanabar, Tax Partner, EY India.
"The Union Budget 2024-25 has reiterated its focus on improving air connectivity through airport infrastructure development, especially in the underserved or unserved markets, given the growing air traffic demand, especially in tier-2 and tier-3 cities, said, Kinjal Shah, Senior Vice President & Co-Group Head - Corporate Ratings, ICRA Limited.
The Union Civil Aviation Ministry had announced the implementation of 5 per cent uniform integrated goods and services tax (IGST) rate on all aircraft and aircraft engine parts effective from July 15. Before this change, IGST rates on aircraft and engine parts were in the range of 5 per cent- 28 per cent.
Moreover, to give a fillip to this employment generating industry, she has proposed a simpler tax regime for foreign shipping companies operating domestic cruises in the country.
The Economic Survey 2023-24 tabled in Parliament on Monday, said that India's aviation industry is poised for a remarkable expansion. It emphasised the importance of enhancing the efficiency and profitability of airlines while prioritising environmental sustainability.
The report indicates that the aviation sector in India is on the verge of substantial growth, with Indian airlines having ordered over 1,500 aircraft and an anticipated demand exceeding 2,200 aircraft by 2042.
To provide sufficient long-haul connectivity, the survey underscored the necessity of fortifying Indian airlines. Currently, a significant portion of India's international air traffic relies on transit hubs in the Middle East and Southeast Asia.
Recognising the aviation sector's vast potential, the survey called for coordinated efforts among the government, industry stakeholders, and international partners. Investments in infrastructure, skill development, and sustainability initiatives are identified as key drivers for the sector's future growth in India.
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.
Published 23 July 2024, 22:43 IST