Budget expectations: Aviation sector

13 Jan 2022 , 01:09 PM

“The Union Budget 2022 should aim at the current financial needs of the sector which were overlooked last year. Measures such as reduction of taxes on aviation turbine fuel (ATF), immediate financial aid until the demand fully recovers and financial incentives to the Maintenance, Repair and Overhaul (MRO) industry should be the highlights. ATF ought to be brought under the GST regime (tax rate capping at 18%) to reduce the costs of Airlines.

Secondly, exempt/ reduce IGST on the parts (including aircraft components) imported for aircraft MRO to boost MRO business. Incentivise foreign investments in MRO by abolishing the framework of royalties and lease rentals by making it cost-competitive. 

Keep the focus on boosting passenger traffic and tap the potential of airports by improving regional connectivity through “Regional Connectivity Scheme/UDAN”. Poonam Verma, Partner, J Sagar Associates (JSA)

The author of this article is Poonam Verma, Partner, J Sagar Associates (JSA)

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com