Aviation
companies are hoping for tax incentives for maintenance, repair and
overhaul (MRO), in the upcoming Union Budget, says rating agency CARE in
its report on pre-Budget expectations of various industries. "Tax
exemptions for MRO setting-up would be a direct step towards
cost-cutting for already bleeding airline sector. A lower tax-structure
will also make the domestic industry competitive with the foreign
players," the CARE report says. The Civil Aviation Ministry on its part
has already pitched for the same and also called for easing of customs
norms for the Indian MRO industry. The ministry believes this will make
domestic units economically viable, while also giving a fillip to Prime
Minister Narendra Modi's 'Make in India' campaign. The industry too has
made quite a few suggestions for the promotion of MRO sector, including
lowering VAT on MRO activities, removal of service tax, 10-year tax
holiday and abolition of central excise duty on MRO, among others. At
the moment the MRO market in India is costlier by around 30 percent,
compared to places like Sri Lanka, Hong Kong, Singapore, China and Dubai
due to 12 percent service tax charged from customers, resulting in
Indian carriers getting their fleet overhauled in other countries due to
lower costs there.
11/02/15 Moneycontrol
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11/02/15 Moneycontrol
