The Minister of Civil Aviation Shri P Ashok Gajapathi
Raju has said that the Budget 2016-17 has paved the way for developing India as
a Maintenance, Repair and Overhauling (MRO) hub of Asia. Speaking to media
persons in New Delhi today, he said that the budget has made provisions for
incentivising domestic value addition to help Make in India. Under this, the
following provisions have been made for the MRO business in India :
a) The tools and tool-kits used by the MRO
have been exempted from Customs and Excise duty.
b) The exemption shall be given
on the basis of documents certified by the Directorate General of Civil
Aviation.
c) Procedure for availment of
exemption from customs and excise duty being simplified based on records and
subject to actual user condition.
d) Restriction of one year for
utilisation of duty free parts being removed.
e) The notification on Standard
Exchange Scheme has been revised to allow import of unserviceable parts by MROs
for providing exchange / advance exchange.
f) Foreign aircraft brought to
India for MRO work will be allowed to stay up to 6 months or as extended by the
DGCA. The aircraft can carry passengers in the flights at the beginning and end
of the stay period in India.
The MRO business of Indian carriers is around Rs
5000 crore, 90% of which is currently spent outside India – in Sri Lanka,
Singapore, Malaysia, UAE etc. Given
our technology and skill base, the government is keen to develop India as an
MRO hub in Asia, attracting business from foreign airlines while retaining the
domestic business.
The above budget provisions
will go a long way in realizing this aim, he said.
Shri Gajapathi Raju also welcomed the budget
provisions aimed at reviving the unserved and under-served airports in the
country for increasing regional connectivity. The Budget 2016 provides that the
Central Government will partner with the State Governments to develop some of
these airports and airstrips in the country The Minister shared with the media
persons the following Action Plan for revival of such airports :
a) Identification of airstrips controlled by
State Governments:
(i) Airports/Airstrips under control of State
Governments will be identified for development in consultation with State
Governments and airlines to make such airports operational.
(ii) Commitment from the State Governments on
tax exemptions, reimbursement of expenditure of the recurring operational cost
by providing free electricity, water and security to the airport. The entire
airport project to have tax exemption from all municipal/property tax and VAT
on ATF are to be brought down. State Government to share the costs for
identified airports/airstrips proposed to be developed.
b) Revival of AAI owned non-operational
airports:
In the financial year
2015-16, AAI proposes to revive 10 non- operational airports.
These airports are initially unviable and would require budgetary support from
the Government.
Talking about the budget
announcement to implement Indian Customs Single Window Project. at
major ports and airports starting from beginning of next financial year Shri
Raju said that this will reduce the dwell time of export and import air
cargo by bringing all regulatory agencies responsible for giving clearances to
a common platform. It will also enable the integration of processes of import
cargo stakeholders so as to enable easy adoption of EDI. Further, he said that
the opportunity for deferred
payment of customs duties as provided by the Budget will facilitate importers
and exporters with proven track record for faster processing of cargo. Hence,
this will reduce the dwell time of their cargo.
About the likely impact of budget on
skill development, the Minister said that
Service Tax exemption under Deen Dayal Upadhyay Grameen Kaushalya
Yojana will enable, firstly, training providers to set up training institutes
across the country. Secondly, it will attract youth for cargo and ground
handling from rural areas of the country. Exemptions for assessing bodies
empanelled centrally by Directorate General of Training will also promote
setting up of training institutes and attracting youth towards civil aviation
sectors. About the increase of Excise Duty on Air Turbine Fuel from 8 % to 14 %
the Minister said that the
decrease in ATF base price over the last 13 months is around 25.04%. The
increase in ATF prices due to increase in excise duty from 8% to 14% comes to
around 6.56%
The Minister of State for
Civil Aviation and Culture & Tourism (I/C) Dr Mahesh Sharma welcomed the
provisions made for the Civil Aviation sector in the Budget 2016 and said it
would give a major boost to the aviation sector in the country and make flying
easy for the common man.
Secretary Civil Aviation
Shri Rajiv Nayan Choubey and other senior officials of the Ministry were also
present on the occasion.
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MA/NP/RS