5% GST for Indian MRO Industry to Reach $4 Billion by 2030

In effect this week, the Ministry of Civil Aviation has announced a uniform 5% Integrated Goods and Services Tax (IGST) rate for all aircraft and aircraft engine parts. The decision was announced by civil aviation minister Ram Mohan Naidu Kinjarapu with the aim of “eliminating the disparities caused by varying GST rates in the country”.

Aviation Minister Speaks

“The introduction of a uniform 5 per cent 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,” he said.

Talking of India’s ambition plans for its aviation sector, he further added, “Our vision is to transform India into a leading aviation hub. The Indian MRO industry is projected to become $4 billion by 2030. This policy change is crucial to building a strong ecosystem for MRO services, driving innovation, and ensuring sustainable growth.”

According to International Air Transport Association’s data, India is all set to become the world’s third-largest air passenger market by 2030, leaving China and USA behind. With the increasing demand, the sector is working at its full capacity to ensure the best of services.