The government has exempted the import of aircraft, aircraft engines and its parts procured on lease from the purview of the Goods and Services Tax (GST).
The Finance Ministry in a notification said that airlines would not have to pay GST on the import of aircraft and its parts if GST was paid on their lease.
The aviation industry had been seeking relief as it was facing a dual levy of 5% at the time of import and another 5% at the time of payment of lease rent.
The Aviation Ministry had raised the issue before the Revenue Department on several occasions.
Airlines are awaiting a formal clarification on several other areas of concerns such as input tax credit not being available for economy class tickets and the movement of spares from one part of the country to another.