What does the uniform IGST rate of 5% for aircraft parts imply for the aviation industry
Explore the effects of the new uniform rate on aircraft parts.
The introduction of a uniform IGST rate of 5% for aircraft parts in the aviation industry will have several effects:
- Cost-effective manufacturing: With a lower tax rate, manufacturers can procure aircraft parts at a lower cost, leading to cost-effective manufacturing processes.
- Boost in aftermarket services: The reduced tax rate can encourage the growth of aftermarket services for aircraft maintenance, repair, and overhaul as the overall cost of parts is reduced.
- Promotion of indigenous production: Lower tax rates can promote domestic production of aircraft parts, reducing dependency on imports and boosting the local aviation industry.
- Improved competitiveness: With decreased costs, airlines may benefit from lower operational expenses, improving their competitiveness in the market.
- Encouraging fleet expansion: The lower tax rate may prompt airlines to expand their fleets or undergo fleet modernization, leading to overall growth in the aviation sector.
Answered
9 months ago