The duty concessions on import of spare parts and testing equipment for the aircraft Maintenance, Repair, Overhaul (MRO) industry proposed in the Union Budget will help the growth of the burgeoning MRO industry in the country.
Though the MRO industry is in a ‘nascent stage,’ as described by Union Finance Minister P. Chidambaram in his budget speech in Parliament on Thursday, the concessions come at a time when the crucial ‘C’ checks of the Boeing 737-800 aircraft have commenced at the MRO facility of Air India Charters Limited (AICL), a fully owned subsidiary of Air India, in the vicinity of the international airport here. The biggest challenge faced by the MRO industry is the high taxation of imported spares, consumables, and components. The budget proposes to exempt basic customs duty for spare parts and testing equipment for MRO facilities. This is expected to reduce the time taken for consumption of spare parts or equipment which comes to three months to one year now. “It will help the growth of the MRO industry, as spares and testing equipment will be exempted from the excise and customs duty. The VAT will vary from State to State. The demand has been put forward to help the MRO industry take off,’’ Director of Engineering, Air India, K.M. Unni, told The Hindu . V. Thulasidas, former Chairman and Managing Director, Air India, says the concessions are necessary to help lay the foundations for the MRO industry. It needs to be encouraged as most airlines, except the national carrier and Jet, take their aircraft abroad for MRO.
As the MRO in Thiruvananthapuram has procured the testing equipment, Mr. Thulasidas says the concessions will not come in handy now. Encouraging MRO will generate employment. The announcement comes at a time when the MRO in the State capital is trying for third party business.
