Important Keyword: Notification No. 02/2020 – Union Territory Tax Rate, UTGST MRO GST rate, aircraft repair GST 5%, MRO GST India, GST notification 2020 aviation,
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[F. No. 354/32/2020- TRU]
Government of India
Ministry of Finance
(Department of Revenue)
New Delhi, the 26th March, 2020
Notification No. 02/2020 - Union Territory Tax (Rate): Seeks to amend Notification No. 11/2017-Union Territory Tax (Rate) dt. 28.06.2017 reducing GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of aircraft from 18% to 5% with full ITC.
GST: [TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
G.S.R......(E).- In exercise of the powers conferred by sub-section (1), (3) and sub-section (4) of section 7, sub-section (1) of section 8, clauses (iv) and (xxvii) of section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), read with sub-section(5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do,
Hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.11/2017- Union Territory Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 702(E), dated the 28th June, 2017, namely:-
In the said notification, in the Table, against serial number 25,
- after item (i) and entries relating thereto, in columns (3), (4) and (5), the following items and entries shall be inserted, namely, -
| (3) | (4) | (5) |
| “(ia) Maintenance, repair or overhaul services in respect of aircrafts, aircraft engines and other aircraft components or parts. | 2.5 | - |
- in item (ii), in column (3), after the brackets and figures “(i)”, the word, brackets, and figures “and (ia)” shall be inserted;
2. This notification shall come into force with effect from the 1st day of April, 2020.
(Pramod Kumar)
Director to the
Government of India
Note: - The principal notification No. 11/2017 - Union Territory Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 702 (E), dated the 28th June, 2017 and was last amended by notification No. 26/2019-Union Territory Tax (Rate), dated the 22nd November, 2019 vide number G.S.R. 872(E), dated the 22nd November, 2019.
📚 Frequently Asked Questions (FAQs): Notification No. 02/2020 – Union Territory Tax (Rate)
Q1: What is Notification No. 02/2020 – Union Territory Tax (Rate)?
Answer:
It is a government amendment reducing the UTGST rate on aircraft MRO services to 5% with full ITC from 01-04-2020.
(Inserted at Sr. No. 25, item (ia) of Notification 11/2017–UTGST Rate)
notfctn-02-2020-utgst-rate-engl…
Q2: Which services are covered under this reduced 5% GST rate?
Answer:
The reduced rate applies to:
Aircraft repair
Aircraft engine repairs
Aircraft parts & component overhaul
Annual maintenance contracts of aircraft components
Example: A Goa-based airline sending its aircraft for engine repair in Chandigarh — GST @ 5% only
Q3: What is the effective date?
Answer:
From 1st April 2020 onward.
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Q4: Is Input Tax Credit allowed?
Answer:
Yes! ✨ Full ITC on input goods & services → No hidden cost burden.
Need ITC reconciliation?
📌 Try GST Return Filing
Q5: Who can avail this reduced GST rate?
Answer:
✔ Airlines
✔ Aviation component manufacturers
✔ Aircraft leasing companies
✔ DGCA-approved MRO service providers
Q6: Does this apply to both Indian & foreign airlines?
Answer:
Yes — location of supplier matters, not nationality of airline.
Q7: Earlier GST rate on MRO services?
Answer:
Previously 18% with ITC → Now significantly reduced to 5%.
Q8: Which law sections empower this change?
Answer:
Based on:
Section 7(1),(3),(4) & Section 8(1) of UTGST Act
Section 15(5) & Section 148 of CGST Act
notfctn-02-2020-utgst-rate-engl…
Q9: Does this apply to spare parts supplied during repairs?
Answer:
👉 Yes, as long as supplies are part of MRO service contract.
Q10: Any condition like “no refund of ITC”?
Answer:
No restrictions — normal ITC flow & refund eligible.
Q11: How does this help Indian aviation?
Answer:
Cheaper repairs → More maintenance done in India
Saves foreign exchange
Boosts indigenous aerospace talent
Q12: Place of supply rules?
Answer:
Place of supply = Location of service recipient (B2B aviation)
→ Helps airlines avail ITC easily
Q13: What if an MRO service is done partly outside India?
Answer:
GST applies only on portion performed in India.
Q14: Any registration requirement?
Answer:
Airline/MRO providers must be GST registered.
Apply Online: 👉 GST Registration
Q15: Do startups in aviation benefit?
Answer:
YES! Reduced cost encourages:
New aviation component repair units
Local skill enhancement
📌 Set up your business: Start Business with Finodha
Download PDF: Notification No. 02/2020 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
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