12th Sept. 2022; Gurugram:
HaveUs Aerotech India Pvt. Ltd., India’s fastest growing component MRO facility in India with capability of scaling multiple folds has opened up India’s first ULD containers assembly cum MRO support centre in Gurugram. The facility is built in an area of 25,000 sq ft. with a covered are of 20,000 sq ft and 5,000 sq ft open area in Sector 76, Gurugram adjoining the NH8.
The opening of the India’s first ULD containers assembly cum MRO centre in Gurugram was done by Mr. Mahesh Malik, Chief Commercial Officer – Cargo, Indigo & Mr. Pierre Dickeli (CEO, SAFRAN-India) in the presence of Mr. Anshul Bhargava, MD, HaveUs Aerotech India Pvt. Ltd. To mark the commencement of this significant milestone, dignitaries from DGCA, other airlines of India & aviation enthusiasts also graced the event with their presence.
ULD (Unit Load Device) is a container used to load luggage, freight, mail, cargo in freighter aircraft). As per the reports, IndiGo, India’s largest airline, shall shortly induct its first freighter plane to capture the boom in air cargo driven by the pandemic. For its new venture, IndiGo has taken support from SAFRAN for providing ULDs. SAFRAN has appointed HaveUs Aerotech as their support centre in India thus making HaveUS us, India’s first ULD containers assembly cum MRO centre.
At the occasion, Mr. Anshul Bhargava, Managing Director, Haveus Aerotech India said, “ India has tremendous growth opportunity in aviation sector and Indian aviation sector is set for significant growth in MRO business, driven by growth in domestic traffic and fleet size. Such mammoth expansion in airline business will also drive growth in overall MRO activity. To take advantage of India’s growth momentum, significant change is required in the MRO setup within India.”
Anshul Bhargava, MD, Haveus Aerotech added, “Compared to their foreign counterparts, the Indian MRO industry is relatively underdeveloped. MROs in India currently provide only a basic level of services within their limited infrastructure. Majority of overseas MROs are subsidiary of major airlines viz, Air France, Lufthansa, Turkish Technic and are able to get apt support from OEMs to develop MRO capability and capitalize on the business opportunities, this is the biggest disadvantage for Indian MROs.”
Airlines in India are primarily dependent on overseas MROs with respect to component related solutions. It is therefore relevant to develop and provide these services within India to reduce dependents on overseas MRO. This will not only reduce overall turnaround time, but will also provide a cost effective solution to airlines through :
• Minimal labor expenses
• Avoiding to & fro transportation of components to foreign MROs thus saving expenses towards freight, customs & taxes.
• Reduce financial burden towards foreign currency remittance
As often highlighted to the Ministry of Civil Aviation through various forums, policies related to the Maintenance, Repair & Overhaul (MRO) sector need to be made more favourable to support the aviation industry. The tax incentives have not provided much help to the aviation sector, especially for the MRO setup. There are few critical issues which need immediate attention & resolution from the Govt.
To bring in certainty with respect to taxes, with the aim to help in reducing costs for the Indian MRO operators. While a decrease in the rate of GST on MRO services has been a welcome measure by the airline operators, no corresponding change in the GST rates on the input leg (i.e. 5%, 12%, 18% or 28%) is creating a working capital blockage on account of the inverted duty structure. Though the refund of GST paid on inputs will be available to the Indian MRO operator after certain period, the cash flow blockage results in an increased cost of operations for the MRO industry.
Another such issue requiring a clarification / resolution has been the rate of GST to be applied on the supply of goods towards the repair services provided by an MRO operator — where the intent of the airline is to avail the repair services from the MRO, while the said services may have a higher value of parts embedded into the same compared to the value of services. This, in turn, is causing a challenge for the MRO and whether the said MRO services provided to airlines will constitute a supply of goods (with GST rate 5%, 12%, 18% or 28% based on the goods supplied) or services (having 5% fixed GST rate) for the purpose of taxability under the GST legislation.
Taxes are levied during the import of goods from overseas for which no claim mechanism is available currently. Provision should be available to claim refund at the time of export of same goods overseas.
Indian MRO industry is also working towards achieving Hon’ble Prime Minister’s goal of self-reliant India and is generating substantial employment within the country and providing skilled manpower.
If MRO industry needs to thrive then there is requirement of a simple tax structure to sustain their business. I firmly believe if Govt. provides apt support, Indian MROs have significant potential to compete with their overseas counterpart.
Thoughts / views of make in India – India is in the forefront in becoming the fastest growing economy in the world and is aiming to become USD 5 trillion economy along. India has recently toppled UK and has taken the fifth spot in global economies. The primary catalyst that has led to this remarkable feat is Govt. push towards ‘Make In India’. India is emerging as the global powerhouse with ‘Make In India’ which facilitate surge in investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country.
