Owners of business jets and other privateaircraft who want their flying machines to be serviced in India will have to pay at least 33-37.5% more to their maintenance repair and overhaul (MRO) service providers as the Airports Authority of India (AAI) has increased levies sharply at all AAI-owned airports in the country from this month. The earlier cess, or royalty charge as it is called, was 13%.
The move by AAI to increase this royalty charge will directly impact the MRO service providers who operate from the airports that are run by the state-owned airport authority (it owns 89 domestic airports) as these companies would now have to charge their clients the additional tax along with 12% service tax, a big negative for business and growth.
Irked by the move and poor timing of the government decision, some of the big MRO players are even considering re-locating business to Middle East. A major player said it is evaluating this re-location.