Govt may provide sops to airline MRO industry

The government is considering providing sops to boost the maintenance, repair and overhaul (MRO) industry in the aviation sector.Sources have told CNBC-TV18 that the Prime Minister's Office has sent a note to the Department of Industrial Policy and Promotion (DIPP) last month, following consultations with the industry, asking it to consider viability of allowing concessions for the MRO industry.The MRO industry is estimated at USD 700 million in India but only 5-10 percent of MRO work is carried out in India as the current tax structure renders operations about 50 percent costlier than in neighbouring countries -- Indian carriers usually send their aircraft to countries like Sri Lanka, Malaysia or Singapore.It is learnt that the PMO has asked the DIPP to consider providing service tax on the labour component of MRO work for a period of 10 years. The note also has sought lowering of royalty paid to the Airports Authority of India, which currently stands at 13 percent.It has also sought SEZ status for MRO hubs, a move which will make imports cheaper.Other than this, the note has laid out several other tax recommendations with respect to cenvat, customs duty and even the proposed GST.