• The customs Baggage Rules for international passengers are being simplified so as to increase the free baggage allowance. The filing of baggage declaration will be required only for those passengers who carry dutiable goods.

• Excise duty on Aviation Turbine Fuel [ATF], other than for supply to Scheduled Commuter Airlines (SCA) from the Regional Connectivity Scheme Airports, being increased to 14% from 8%. ATF for supply to aircraft under the Regional Connectivity Scheme will continue to attract 8% excise duty.

• The Government is drawing up an actionplan for revival of unserved and underserved airports. There are about 160 airports and air strips with State Governments which can be revived at an indicative cost of Rs50 crore to Rs100 crore each. The government will partner with the State Governments to develop some of these airports for regional connectivity. Similarly, 10 of the 25 non-functional air strips with the Airport Authority of India will also be developed.

• Rs 1700 crore for equity infusion in Air India

• Maintenance, repair and overhaul [MRO] of aircrafts: Tools and tool kits being exempted fromBasic Customs duty, CVD and SAD whenimported by MROs for maintenance,repair, and overhauling [MRO] of aircraftsubject to certification by the DirectorateGeneral of Civil Aviation.

1. Exemption from excise duty beingextended to tools and tool kits whenprocured by MROs for maintenance,repair, and overhauling [MRO] of aircraftsubject to a certification by theDirectorate General of Civil Aviation.
2. Procedure for availment of exemption from customs duties on parts, testingequipment, tools and tool-kits formaintenance, repair and overhaul of aircraft being simplified based on recordsand subject to actual user condition.
3. The restriction of one year for utilizationof duty free parts for maintenance, repairand overhaul of aircraft being removed.The existing conditions of stay [60 days] being further relaxed, so as to provide forstay up to 6 months of the foreign aircraft for maintenance, repair or overhauling,with further extension of such period byDGCAs as deemed fit.
4. The procedure for availment of exemption from excise duty on parts, testing equipment, tools and tool-kits formaintenance, repair and overhaul ofaircraft being simplified based on records.
   

Stocks to watch

Jet Airways, SpiceJet, and InterGlobe Aviation

Outlook

The Budget is mixed for the civil aviation sector as government push to improve regional connectivity by reviving 160 airports was negated by a hike in excise duty on jet fuel.

To boost Maintenance, repair and overhaul [MRO] of aircrafts in India, the government announces sops include zero service tax on MRO, services, simplification of import processes for aircraft spares, exemption on customs duty for maintenance tools and tool kit and removal of the one year window restriction period for using duty free parts.

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