GST reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services

In the pre-Covid financial year (2019-20), the average number of passengers carried per day was roughly 4 lakh. Domestic airlines in India carried approximately 3.7 lakh passengers on March 6, 2022. In a few months, the number of daily aviation passengers may surpass pre-COVID levels.

The government has taken a number of measures to accommodate future demand in the aviation sector, including the following:

• In the next five years, the AAI plans to invest roughly Rs. 25,000 crores (US$ 3.26 billion) in the construction of new and existing airports. This comprises new terminal construction, enlargement and alteration of existing terminals, expansion and/or strengthening of existing runways, aprons, ANS infrastructure, control towers, and technical blocks, among other things.
• By 2025, the public-private partnership (PPP) airports in Delhi, Hyderabad, and Bengaluru will have completed major expansion projects worth roughly Rs. 30,000 crores (US$ 3.91 billion). In addition, Rs. 36,000 crores (US$ 4.70 billion) has been set aside for the development of new greenfield airports across the country through a public-private partnership (PPP).
•  The Indian government has given its 'in principle' clearance for the construction of 21 greenfield airports around the country. 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 are the eight Greenfield airports that have been operationalized so far.
• As of 31 January 2022, 403 routes connecting 65 airports (including 8 heliports and 2 water aerodromes) had been operationalized under the Regional Connectivity Scheme (RCS) - UdeDesh ka Aam Nagrik (UDAN).
• For residential Maintenance, Repair, and Overhaul (MRO) services, the Goods and Services Tax (GST) rate has been decreased from 18% to 5%.
•  A favourable lease and financing environment for aeroplanes has been created.
• Improvements to air navigation infrastructure are being made at Indian airports.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.