New Delhi, Feb. 25: Aircraft maintenance major Air Works today sought a reduction in service tax and import duty on spare parts in the budget.
Vivek N. Gour, managing director of the Mumbai-based MRO (maintenance, repair and overhaul) company, said the 19 per cent import duty on spares and a 12 per cent service tax were the biggest burden on the industry.
“The government should create a level-playing field for MROs, encourage the budding industry and provide incentives so that domestic airlines are not forced to send their aircraft abroad for checks, repairs and maintenance,” he said.
Carriers such as IndiGo and SpiceJet have to fly to Singapore and Colombo for repair and maintenance.
Gour, who maintains that the MRO industry has a huge potential in India, said the lack of support had hampered the growth of not only private players but also Air India’s newly formed MRO wing. “Also it is holding back an enormous employment potential.”
The aviation sector is hoping for a full exemption from customs and countervailing duties on aircraft spare parts, tyres and testing equipment.
According to analysts, Indian MROs can cater to aircraft from South and Southeast Asia along with those from Central Asia if the sector gets the required support.
According to the Twelfth Five-Year Plan (2012-17), the country’s MRO industry is expected to triple in size to Rs 7,000 crore per annum by 2020 from Rs 2,250 crore in 2010. However, it will still be small compared with the UAE (Rs 8,000 crore per annum) and China (Rs 10,000 crore).
The civil aviation ministry today took away all bilateral international flying rights from Kingfisher Airlines. The carrier, which has not operated a single flight since October, had the rights to fly to eight countries.
The rights are being withdrawn because of “non-utilisation”, and will be redistributed among other carriers, civil aviation minister Ajit Singh said.