High taxes ground HAL’s plan for Bangalore engine repair unit

Bangalore/Mumbai: A proposed joint venture between state-run aircraft manufacturer Hindustan Aeronautics Ltd (HAL) and Canada’s Pratt and Whitney to maintain and repair plane engines has been put on hold because of concerns over taxes to be levied on spares and services.
HAL had planned the equally owned joint venture with aircraft engine maker Pratt and Whitney, which is owned by US conglomerate United Technologies Corp., for setting up a maintenance, repair and overhaul (MRO) unit in Bangalore for engines that power executive jets and turboprop planes flying shorter routes.
Higher import duties and additional service tax would increase the cost of such a venture by half, an HAL official said, requesting anonymity. Imported spares attract a customs duty of 34.13% and the service tax on the value of the repair service is 12.36%.
A Pratt and Whitney spokesperson, however, maintained that talks were still on and that tax regulations were not a concern at this point in time. The company did not specify a time frame for the venture to start.
12/02/08 K. Raghu and P.R. Sanjai/Livemint

To Read the News in full at Source, Click the Headline

Categories: Foreign Feb 2008, Indian Aviation- In General Feb 2008