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The centre has reduced the Goods and Services Tax (GST) rate for domestic Maintenance, Repair and Overhaul (MRO) services from 18 percent to 5 percent. The move has been taken to meet the increasing demand of the aviation sector.
The government has also reduced the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) in 11 states including Andaman & Nicobar Islands, Dadar & Nagar Haveli and Daman & Diu, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Ladakh, Madhya Pradesh, Tripura, Uttar Pradesh and Uttarakhand.
This was informed by Minister of State in the Ministry of Civil Aviation Gen VK Singh (Retd) in a written reply in the Rajya Sabha on March 14, 2022.
Find below other steps taken to meet increasing demand in aviation sector in future:
1. The Airports Authority of India (AAI) has started development of new and existing airports with a projected capital expenditure of Rs. 25,000 crores in next five years. This includes expansion and modification of existing terminals, construction of new terminals, expansion or strengthening of existing runways, control towers, technical blocks, infrastructure and Airport Navigation Services (ANS).
2. The government has planned an investment of around Rs. 36,000 crores in the development of new Greenfield airports across the country under PPP mode. The PPP airports at Delhi, Bengaluru and Hyderabad are undertaking major expansion projects worth around Rs 30,000 crore by 2025.
3. The centre has given ‘in-principle’ approval to 21 Greenfield Airports across the country, among which eight have already been operationalised including in Kushinagar in Uttar Pradesh, Kannur in Kerala, Orvakal in Andhra Pradesh, Sindhudurg and Shirdi in Maharashtra, Durgapur in West Bengal, Pakyong in Sikkim and Kalaburagi in Karnataka.
4. Around 403 routes connecting 65 airports have been operationalised under Regional Connectivity Scheme (RCS) – UdeDesh ka Aam Nagrik (UDAN).
5. The government has enabled a conducive aircraft leasing and financing environment.
6. The centre is also carrying out improvements in air navigation infrastructure at Indian airports.
Background
The number of daily air passengers is expected to cross pre-pandemic levels in a few months, especially with reopening of scheduled International commercial passenger flights from March 27. The average number of passengers carried in pre-covid financial year, FY19-20 was around 4 lakh a day In comparison, the domestic airlines alone carried 3.7 lakh passengers as of March 6, 2022.
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