The ministry of civil aviation has requested the ministry of finance to remove service tax on aircraft MRO (maintenance, repair and overhaul) activities in an effort to facilitate the growth of the industry.
Replying to a question in the Rajya Sabha on Tuesday, minister of state for civil aviation, G M Siddeswara said the government has not prepared any formally policy on aircraft MRO facilities, but it has identified necessary constraints in consultation with the stakeholders, which affect the growth of the industry.
"We have requested the Ministry of Finance to remove Service Tax on MRO work or provide a Service-tax holiday for ten years and Custom duty on import of consumables and tool-kits used by MROs as applicable to airlines maintaining their own aircraft, along with providing faster custom clearance round-the-clock on all days," he said.
Siddeswara said they have also requested the Finance Ministry to simplify the procedures of custom clearance and procedures specifying time limits to consume spare parts. State Governments on the other hand, have been requested to remove VAT on spare parts sold by MROs.
The Airports Authority of India has been asked to relax the stringent requirement of Royalty charged on MRO revenues and identify areas at airports where MRO activities can be started, he added.